Batteries, because the new US rules make foreign car manufacturers cry
New US battery rules for electric cars exclude models from Volkswagen, BMW, Nissan and Hyundai from tax credits. The Americans General Motors and Tesla, on the other hand, are celebrating. All the details
Yesterday, the US Treasury Department announced that several automakers, both American and especially foreign, will not be able to access the $7,500 tax credit for their electric vehicles because they do not comply with new battery procurement rules .
COMPANIES AND MODELS THAT WILL NOT BE ABLE TO ACCESS THE TAX CREDIT
The companies that will lose access to the bonus are Volkswagen (German), BMW (German), Volvo (Swedish), Nissan (Japanese), Hyundai (South Korean) and Rivian (American). Tesla, which is American, will see the credit for the purchase of the Model 3 Standard Range halved, to 3750 dollars; other models from the same house, on the other hand, will continue to get the full price.
More specifically, the electric vehicles that will no longer be able to benefit from the tax credit guaranteed by the Inflation Reduction Act – it is the 369 billion dollar law to stimulate technologies for the energy transition – are the BMW 330e, the BMW X5 xDrive45e, the Rivian R1S and R1T, the Volkswagen ID.4. As for hybrid and plug-in hybrid cars, they are the Audi Q5 TFSI, the Audi quattro and the Volvo S60.
INDEPENDENCE FROM CHINA
Volvo is a Swedish company but Chinese-owned: it is 82 percent owned by the Geely group. China is precisely the country that the United States, through the Inflation Reduction Act, aim to overcome in clean tech : Beijing, in fact, dominates the global battery supply chain, both as regards the manufacturing of the finished device and for the supplies of base materials (so-called “critical metals”) and intermediates.
The administration of President Joe Biden therefore wants to create a US and North American value chain for batteries in order to avoid developing a deep industrial dependence on China. The White House's goal is for half of new vehicles sold in the country by 2030 to be electric or plug-in hybrids.
THE NEW BATTERY RULES
The Inflation Reduction Act requires that for a vehicle to qualify for a $3,750 tax credit, 50 percent of the value of the battery components must have been manufactured or assembled in North America (United States, Canada, Mexico).
To access the other 3750 dollars of the incentive, 40 percent of the value of the critical minerals present (lithium, nickel, cobalt…) must come from the United States or from a country covered by a free trade agreement (the rest of North America , for example but not the European Union).
THE RESPONSE OF THE COMPANIES
Volkswagen said it was "fairly optimistic" that its ID.4 SUV would be eligible for the tax credit: "we are awaiting proper documentation from a supplier to determine credit eligibility."
Nissan said it was working "closely with our suppliers, and we hope that in the future the Leaf will be eligible for at least partial credit."
DOES THE WHITE HOUSE BENEFIT AMERICAN HOMES?
In addition to Tesla, the house that will benefit the most from government subsidies is General Motors, US: the Treasury Department has said that all the company's models will be able to receive the full $7,500 bonus. The Model 3 (with the exception of the economy version, which features a battery made in China ) and the Model Y from Elon Musk's company qualify for the $7,500 credit: they are the two best-selling electric car models currently in the United States .
Most of Ford Motor's electric and plug-in hybrid models, also American, will instead get incentives of 3750 dollars, as will many vehicles of Chrysler (US brand but part of the Stellantis group).
The Biden administration's rules on battery procurement, wrote the New York Times , "give US automakers at least a temporary advantage over [foreign, ed ] competitors such as Toyota, Volkswagen and Nissan".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/crediti-auto-elettriche-regole-batterie-stati-uniti/ on Mon, 24 Apr 2023 05:43:31 +0000.