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Top Automakers Push to Extend EV Tax Credits

Top EV automakers like Toyota, General Motors, and Tesla are making one last effort to change the Democrat’s new spending bill. This comes because of their concern they will be losing out on the strict new limits on electric vehicle tax credits. The popular $7,500 tax credit was included in the new deal that was moved forward in the government by West Virginia Senator, Joe Manchin and New York Senate Majority Leader, Chuck Schumer, however, this credit did not come without multiple stipulations in the deal.

The Intricacies

Among the restrictions made, a rule states that any EVs made with battery components from China or other “Foreign entities of concern” would be ineligible to receive the credit after 2023.  Beginning in 2025, the ban would extend to the use of any critical mineral in a battery that is extracted or processed by the companies.

This could pose a large threat to those automobile manufacturers who utilize connections to the Chinese supply chain.  This would be such a large issue because the processing of minerals such as lithium, cobalt, and others used for EVs is typically done almost exclusively in China.

This massive limit on the credit could hinder President Joe Biden’s ambitious goal of making at least 50% of new vehicle sales emissions-free by 2030, which he mentioned was a critical goal he wanted to be met to suppress the worsening conditions of climate change.

Wrap Up

So far, automakers haven’t begun to make much headway, with senators unwilling to consider any major changes because they don’t want any backlash affecting the support of the bill and it being passed. The top automakers are running out of time to get these rules tweaked, and it remains to be seen if they make any progress soon.

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