The Strategist

Reuters: New bill in USA may stall electric cars development

08/09/2022 - 11:10

A group of carmakers that includes General Motors, Toyota Motor, Volkswagen, and others claimed that a tax incentive package passed by the U.S. Senate on Sunday would cast doubt on viability of meeting the country's goals for the adoption of electric vehicles by 2030.
According to Alliance for Automotive Innovation CEO John Bozzella, "Unfortunately, the tax subsidy requirements for electric vehicles in this legislation would instantly put the majority of automobiles out of reach of these incentives… This law would call into doubt our overarching aim of increasing sales of electric vehicles to 40% to 50% of total sales by 2030."

The association issued a warning that the law's $7,500 tax credit for American buyers would not be applicable to the majority of current electric car models.

In order to qualify for the credit, a car must be built in North America, which would immediately exclude a number of current models from the law once it goes into force.

Other limitations are also imposed by the measure, such as to stop automakers from employing components made in China. The regulation specifically stipulates that a specified proportion of battery components must be obtained from North America. After 2023, using the tax credit to purchase a vehicle with a battery made in China will no longer be an option.