An electric vehicle is charged in Monterey Park, California, on April 12, 2023. – US President Joe Biden’s administration unveiled new proposed auto emissions rules, aiming to accelerate the electric vehicle transition with a target of two-thirds of the new US car market by 2032.
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Fewer electric vehicles now qualify for federal tax credits after the Biden administration this week unveiled stricter rules for battery sources that will prioritize domestically manufactured models.
The new list published by the Treasury Department includes 16 U.S. manufactured models from Ford, General Motors, Tesla and Stellantis. Ten of the models on the new list will qualify for the full $7,500 tax credit, with the rest qualifying for half that amount. Vehicles losing credits include those from BMW, Hyundai, Nissan, Rivian, Volkswagen and Volvo Cars. Some vehicles from those brands may still qualify for the credits if they are assembled in the U.S. and if certain components are sourced domestically.
The new rules apply to vehicles delivered to consumers starting Tuesday.
Tax incentives for EVs are designed to lower the costs for consumers, who have cited the high prices as a main barrier to going electric. The average new EV in the U.S. costs about $58,600, or almost $10,000 more than the average new vehicle.
A BMW iX3 electric SUV is on display during 2020 Beijing International Automotive Exhibition (Auto China 2020) at China International Exhibition Center on September 26, 2020 in Beijing, China.
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The new incentives are part of the Inflation Reduction Act (IRA), the landmark climate law that President Joe Biden signed in August. The bill set various manufacturing requirements for new all-electric and plug-in hybrid vehicles to qualify for the $7,500 tax credit. The law also established limits on sales prices and excluded consumers who earn more than $150,000 a year and couples who earn more than $300,000.
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