New U.S. Bill Limits Subsidies, Automakers Say Jeopardizes 2030 EV Adoption Goal

New U.S. Bill Limits Subsidies, Automakers Say Jeopardizes 2030 EV Adoption Goal

According to foreign media reports, an industry group representing General Motors, Toyota, Volkswagen and other major automakers said the $430 billion “Reducing Inflation Act” passed by the U.S. Senate on Sunday will jeopardize the 2030 U.S. electric vehicle adoption goal.


John Bozzella, chief executive of the Alliance for Automotive Innovation, said: “Unfortunately, the EV tax credit requirement will immediately disqualify most cars from the incentives, and the bill will also jeopardize our ability to achieve by 2030. The collective target of 40%-50% of EV sales.”


The group warned on Friday that most electric vehicle models would not qualify for a $7,500 tax credit for U.S. buyers under the Senate bill. To qualify for the subsidy, cars must be assembled in North America, which would make many electric vehicles ineligible as soon as the bill goes into effect.


The U.S. Senate bill also imposes other restrictions to prevent automakers from using materials made in other countries by gradually increasing the proportion of battery components sourced from North America. After 2023, cars using batteries from other countries will not be able to receive subsidies, and key minerals will also face procurement restrictions.


Senator Joe Manchin, who pushed for the restrictions, said EVs shouldn’t rely on foreign supply chains, but Senator Debbie Stabenow of Michigan said such mandates ” doesn’t work”.


The bill creates a $4,000 tax credit for used electric vehicles, while it plans to provide billions of dollars in new funding for electric vehicle production and $3 billion for the U.S. Postal Service to buy electric vehicles and battery-charging equipment.


The new EV tax credit, which expires in 2032, will be limited to electric trucks, vans and SUVs priced up to $80,000, and sedans up to $55,000. Families with adjusted gross income of $300,000 or less will be eligible for the subsidy.


The U.S. House of Representatives plans to vote on the bill on Friday. U.S. President Joe Biden has set a goal for 2021: By 2030, electric vehicles and plug-in hybrids account for half of all new vehicle sales.

Post time: Aug-16-2022