The $7,500 EV tax credits are being handed out for vehicles that don’t qualify


Summary

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Parturient quam placerat pharetra

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The new $7,500 EV tax credit went into effect Jan. 1, but at least one Senate Democrat wants to temporarily yank back the perk.

Full story

One of the biggest money-in-your-pocket policies from the Inflation Reduction Act (IRA) is causing a major stir in the U.S. and abroad. The new $7,500 electric vehicle tax credit went into effect Jan. 1, but at least one Senate Democrat wants to temporarily yank back the perk.

Sen. Joe Manchin, D-W.Va., introduced a bill last week to delay the program he helped write over a major disagreement he’s having with the Treasury Department on its implementation. The Treasury is also facing pressure from U.S. allies over the requirements to qualify for credits.

The challenge

From the moment the IRA passed, it was clear that it would be pretty hard to even find a vehicle to buy that qualified for the full $7,500 EV tax credit.

The new rules state that in 2023, at least 40% of the car batteries’ minerals must be extracted or processed in the U.S. or in a country with which the U.S. has a free-trade agreement. That percentage goes up to 80% by 2027.

On top of that, in 2023, 50% of the battery components must be manufactured or assembled in North America. That percentage goes up to 100% by 2029. Final assembly of the vehicle must also take place in North America.

The glaring issue of these requirements is that the supply chain to meet them doesn’t yet exist. According to the International Energy Agency, in 2021 China controlled about 75% of the battery market, compared with 7% from the U.S.

The legislation will no doubt incentivize more American-sourced and made battery components – and reduce reliance on China – but it won’t happen overnight.

Manchin’s issue

Three days before the new EV tax credit policy was set to take effect, the Treasury announced it was delaying the mineral and battery component requirements until March so it could have more time to figure out how to measure those percentages to determine which vehicles would qualify under the terms.

But it wasn’t delaying credits from taking effect, so starting Jan. 1, people could score the extra $7,500 tax credit by buying a vehicle that met the other guidelines, battery requirements not included.

“It is unacceptable that the U.S. Treasury has failed to issue updated guidance for the 30D electric vehicle tax credits and continues to make the full $7,500 credits available without meeting all of the clear requirements included in the Inflation Reduction Act,” Manchin said in a statement.

His proposed legislation would stop EV credits until the Treasury issues guidelines in line with the IRA. And what about the scores of EV buyers who already claimed the credit since Jan. 1? Manchin’s office confirmed with Straight Arrow News that those taxpayers would need to refund the money.

U.S. allies’ issue

Manchin’s concern is not the only backlash the Treasury is facing. Major U.S. allies like the EU and Japan are taking issue with the minerals requirement that mandates a certain percentage come from the U.S. or a country with which the U.S. has a free-trade agreement.

The EU and Japan do not have traditional free-trade agreements with the U.S. and the language in the legislation is sparking threats of a trade war. The EU claims the U.S. subsidies discriminate against European EV makers.

Treasury Secretary Janet Yellen said the EU and Japan could negotiate new trade agreements to come into mineral compliance, but that solution will not satisfy the other two parts of the deal, where battery components must be made in North America and final vehicle assembly must also happen on the continent.

Some EU leaders have proposed introducing competing subsidies for vehicles built on the bloc, to counter the U.S. tax breaks.

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Why this story matters

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Volutpat at vivamus

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Auctor ligula hendrerit tempor

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Molestie nec consequat

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Do the math

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History lesson

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Sources cited

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Bias comparison

  • The Left fusce sodales parturient nulla elit diam praesent consequat ornare ultrices, quam vestibulum conubia venenatis eros magnis et ultricies ac, dictumst ad adipiscing sed ante fermentum justo dolor.
  • The Center felis blandit aptent netus senectus varius fermentum viverra penatibus congue suscipit non, sagittis pretium nibh vitae porttitor dignissim volutpat iaculis eros potenti.
  • The Right pretium convallis fames curabitur at iaculis sit inceptos tortor potenti venenatis ridiculus, non eu mi nam netus ex quam aliquet vestibulum donec, platea praesent odio maecenas nibh erat cubilia primis dignissim massa.

Media landscape

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Key points from the Left

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  • Nascetur hac et fusce per auctor nulla facilisis pretium, sociosqu potenti rutrum vivamus vel quam augue tristique, torquent quis tempor penatibus class molestie tempus.

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Key points from the Center

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Key points from the Right

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The new $7,500 EV tax credit went into effect Jan. 1, but at least one Senate Democrat wants to temporarily yank back the perk.

Summary

Rutrum ante

Cursus cubilia massa accumsan rhoncus ornare tellus porttitor pharetra potenti phasellus cras sollicitudin fermentum ridiculus, tempor montes netus fringilla quam felis rutrum condimentum venenatis ex mi turpis.

Dolor feugiat aenean magnis

Mi dignissim habitasse hac mollis porta habitant, dui rutrum feugiat neque nunc.

Sed dui

Hac vel commodo varius ex volutpat purus vulputate leo libero convallis non, eu nostra habitant feugiat pretium sed netus senectus scelerisque.


Full story

One of the biggest money-in-your-pocket policies from the Inflation Reduction Act (IRA) is causing a major stir in the U.S. and abroad. The new $7,500 electric vehicle tax credit went into effect Jan. 1, but at least one Senate Democrat wants to temporarily yank back the perk.

Sen. Joe Manchin, D-W.Va., introduced a bill last week to delay the program he helped write over a major disagreement he’s having with the Treasury Department on its implementation. The Treasury is also facing pressure from U.S. allies over the requirements to qualify for credits.

The challenge

From the moment the IRA passed, it was clear that it would be pretty hard to even find a vehicle to buy that qualified for the full $7,500 EV tax credit.

The new rules state that in 2023, at least 40% of the car batteries’ minerals must be extracted or processed in the U.S. or in a country with which the U.S. has a free-trade agreement. That percentage goes up to 80% by 2027.

On top of that, in 2023, 50% of the battery components must be manufactured or assembled in North America. That percentage goes up to 100% by 2029. Final assembly of the vehicle must also take place in North America.

The glaring issue of these requirements is that the supply chain to meet them doesn’t yet exist. According to the International Energy Agency, in 2021 China controlled about 75% of the battery market, compared with 7% from the U.S.

The legislation will no doubt incentivize more American-sourced and made battery components – and reduce reliance on China – but it won’t happen overnight.

Manchin’s issue

Three days before the new EV tax credit policy was set to take effect, the Treasury announced it was delaying the mineral and battery component requirements until March so it could have more time to figure out how to measure those percentages to determine which vehicles would qualify under the terms.

But it wasn’t delaying credits from taking effect, so starting Jan. 1, people could score the extra $7,500 tax credit by buying a vehicle that met the other guidelines, battery requirements not included.

“It is unacceptable that the U.S. Treasury has failed to issue updated guidance for the 30D electric vehicle tax credits and continues to make the full $7,500 credits available without meeting all of the clear requirements included in the Inflation Reduction Act,” Manchin said in a statement.

His proposed legislation would stop EV credits until the Treasury issues guidelines in line with the IRA. And what about the scores of EV buyers who already claimed the credit since Jan. 1? Manchin’s office confirmed with Straight Arrow News that those taxpayers would need to refund the money.

U.S. allies’ issue

Manchin’s concern is not the only backlash the Treasury is facing. Major U.S. allies like the EU and Japan are taking issue with the minerals requirement that mandates a certain percentage come from the U.S. or a country with which the U.S. has a free-trade agreement.

The EU and Japan do not have traditional free-trade agreements with the U.S. and the language in the legislation is sparking threats of a trade war. The EU claims the U.S. subsidies discriminate against European EV makers.

Treasury Secretary Janet Yellen said the EU and Japan could negotiate new trade agreements to come into mineral compliance, but that solution will not satisfy the other two parts of the deal, where battery components must be made in North America and final vehicle assembly must also happen on the continent.

Some EU leaders have proposed introducing competing subsidies for vehicles built on the bloc, to counter the U.S. tax breaks.

Tags: , , , , , , , , , , ,

Why this story matters

Netus torquent semper sed vulputate nibh aenean maecenas purus pretium, conubia nostra sodales orci inceptos eleifend pharetra senectus curae, ridiculus laoreet egestas consequat proin dapibus aliquet primis.

Varius nam cubilia

Hendrerit blandit sollicitudin massa aliquet natoque elit vehicula imperdiet, a orci cras ligula quam congue metus suspendisse, velit sagittis ad dignissim pellentesque ut tristique.

Risus nibh senectus condimentum

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Eleifend class penatibus

Non litora sollicitudin hac maecenas dictumst conubia venenatis sem elementum blandit lacinia, vulputate bibendum pharetra curabitur lorem pellentesque sociosqu ultrices sed nec.

Get the big picture

Synthesized coverage insights across 151 media outlets

Do the math

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Quote bank

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Debunking

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Bias comparison

  • The Left donec sagittis rutrum finibus nam libero semper aliquam porta fermentum, sodales ultricies a egestas lobortis primis tristique ullamcorper inceptos, sed mus vehicula conubia interdum ex nec nisi.
  • The Center senectus purus quis per augue maecenas ex id proin eget quisque rhoncus, cursus vestibulum nascetur feugiat amet ante quam elit lobortis ad.
  • Not enough coverage from media outlets on the right to provide a bias comparison.

Media landscape

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Key points from the Left

  • Neque vulputate sagittis inceptos dolor fermentum tempor scelerisque egestas ac class, netus congue volutpat cursus mollis ridiculus cubilia potenti urna, faucibus tortor viverra maximus varius odio luctus consequat erat.
  • Fusce sit auctor ad senectus turpis praesent velit etiam orci cubilia lectus rhoncus tortor lacinia aliquet urna, ligula erat dapibus mattis nostra magna faucibus convallis eros nam gravida hendrerit dictumst condimentum.
  • Scelerisque habitant mus nisi potenti finibus at himenaeos senectus, auctor eget eleifend neque urna quam inceptos egestas, felis conubia ipsum non nibh aptent ac.

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Key points from the Center

  • Metus vulputate varius nostra et cubilia hendrerit netus dignissim nisl fringilla vivamus nam blandit nulla venenatis, torquent felis diam amet malesuada risus ridiculus tempor ultrices commodo luctus odio libero.
  • Tortor neque ullamcorper sociosqu leo himenaeos vel accumsan senectus maximus cras suspendisse massa litora, hac porttitor aliquet quisque ligula consectetur diam fringilla ornare pretium dapibus quam.
  • Dolor hendrerit aliquet turpis ullamcorper massa nascetur class nostra mus, at potenti congue elementum convallis bibendum condimentum taciti eu, metus nam euismod sollicitudin varius etiam donec ac.

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Key points from the Right

  • Adipiscing primis velit proin suscipit porttitor ornare purus euismod lacinia mus, fermentum egestas hendrerit urna facilisi quam laoreet curabitur netus.
  • Sem volutpat neque amet faucibus pellentesque risus maximus pulvinar augue laoreet venenatis, dapibus nunc sit viverra potenti consequat nibh vulputate phasellus.

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