U.S. Government Widens Timeframe for EVs to Adapt to Domestic Production Standards

May 8, 2024
The final requirements released for EV tax credits may make more vehicles eligible in 2025 and 2026.

The U.S. government has allowed a wider timeframe for automakers to adapt to its standards for domestically-sourced battery materials, reports AP News.

Final regulations for the credits included under the 2022 Inflation Reduction Act were released by the Treasury Department this past Friday, which originally, beginning in 2025, would have required EV batteries to not contain any critical materials from outside the United States to be eligible for tax credits.

Following input from the auto industry, treasury officials have expanded that timeframe. Though this year will see the rollout of rules designed to bolster domestic production of EV battery supplies, small amounts of graphite and other materials will now be exempt from these rules until 2027.

As of this year, consumers who purchase an EV from an authorized dealer will receive eligible tax credits at the time of purchase, which can range from $3,750 to $7,500 for new EVs. Requirements for eligibility include the buyer’s income, the vehicle’s price, and where the battery’s materials are sourced from.

Without the recently added exemption for small amounts of graphite, some vehicles meeting nearly every requirement for tax credits would be disqualified from having them, which could potentially make more EVs eligible for tax credits in 2025 and 2026.

While Alliance for Automotive Innovation CEO John Bozzella approved of the change, the National Mining Association as well as West Virginia Sen. Joe Manchin have opposed it, arguing that it gives more power in the EV market to China. 

About the Author

Ratchet+Wrench Staff Reporters

The Ratchet+Wrench staff reporters have a combined two-plus decades of journalism and mechanical repair experience.

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