EV Cars

Many GM and Ford electric vehicles will lose their tax credits in 2024

According to a report directly quoting GM, the Chevy Bolt EV will be the automaker’s only electric vehicle eligible for the full electric vehicle tax credit starting January 1.

Yes, this is a model that is no longer in production and will become increasingly difficult to find at dealers in 2024.

GM announced that the Chevrolet Blazer EV and Cadillac Lyriq will be eligible for tax credits again in early 2024, the company said Reuters that it expects its Chevy Equinox EV, Chevrolet Silverado EV, GMC Sierra EV and Cadillac Optiq manufactured “following the sourcing change” to be eligible for the full incentive.

Ford Mustang Mach-E and F-150 Lightning receive CATL LFP batteries

Ford Mustang Mach-E and F-150 Lightning receive CATL LFP batteries

Additionally, Ford told Reuters that its E-Transit and Mustang Mach-E, both currently eligible for $3,750, will lose the credit entirely. The Ford F-150 Lightning and Lincoln Corsair Grand Touring retain their $7,500 and $3,750 credits, respectively.

Why are some electric vehicles falling by the wayside? Simply put: the more detailed procurement requirements become, the more complicated qualification becomes in a globalized automotive industry.

Engine family for GM Ultium-based electric vehicles

Engine family for GM Ultium-based electric vehicles

For the Blazer EV, for example, GM assembles the drive units in the same complex in Ramos Arizpe, Mexico, where the Blazer EV itself is built. GM designed and has developed its Ultium engines in-housebut, for example, the permanent magnet motor used in various roles across the Blazer EV range is manufactured by South Korea’s LG at factories in China and Mexico.

At GM’s recent media event for the Blazer EV, GM deputy chief engineer Patrick Lencioni, who oversees the suite of engines that will be installed in a number of its Ultium electric vehicles, told Green Car Reports that the company is strategically involved in this case LG collaborates to “Move the footprint as needed” depending on the sourcing rule.

Engine family for GM Ultium-based electric vehicles

Engine family for GM Ultium-based electric vehicles

Starting January 1, the Treasury Department is expanding foreign content restrictions to include other “low-value” components.

It is the latest regulation already announced under the Inflation Reduction Act advocated by the Biden administration. The electric vehicle tax credit was completely converted to the clean vehicle tax credit last year. It maintained its maximum of $7,500 and plug-in hybrid eligibility with a minimum battery capacity. However, caps on household income and MSRP of vehicles applied, vehicles had to be assembled in the United States, Mexico, or Canada, and over the years, the contents of components in electric vehicles increasingly had to be sourced outside the United States from preferred U.S. trading partners .

Earlier this month, the Energy Department made the move clearer – and more stringent – than expected, framing it as a “foreign entity of concern.” excludes EV content from ChinaRussia, Iran and North Korea in the manufacture and assembly of battery components, to the mining, processing and recycling of critical minerals in 2025.

Green Car Reports reached out to Ford and GM to get details about what’s keeping these vehicles from meeting credit requirements – and to confirm the list.

2023 Tesla Model Y

2023 Tesla Model Y

GM and Ford aren’t the only ones expecting to lose their tax credit. Tesla announced earlier this month that the Model 3 Rear-Wheel Drive and Long Range models would no longer be eligible for the credit after December 31, while just last week it indicated that some versions of them would no longer be eligible The Tesla Model Y “probably” won’t do that keep the full amount of the tax credit.

However, there is still scope for automakers to access another commercial vehicle loan that serves as Loophole for leasing electric vehicles– Provide up to $7,500 off the total cost of the rental, regardless of price caps or content requirements.

There will also be a tax credit from 2024 an immediate dealer discount, with dealers able to use it at the point of sale, helping some families reduce the financed cost of new vehicles. However, it is still up to households to ensure their eligibility.

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