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the new EV tax credits in scaled back better ?3

13:48 08-Aug-22


I'm mostly glad we're getting our second EV when we are.  On one hand the $7500 tax credit from "scaled back better", which I think is a much more fitting name than the Inflation Reduction Act, can be applied at the dealer rather than via one's tax return.  However, it applies to battery cars with an MSRP below below $55K and trucks & SUVs below $80K.  So far so good for our Ioniq 5, but it is not assembled in North America and is thus disqualified.  Furthermore, starting in 2024, materials and “critical minerals” in the battery must also come from America or a country with which it has a free trade agreement,  Details on the thresholds will be released by year end, and they will increase each year throughout the 10-year program.

There's a lot of angst out there about what this will do to the EV market, but my experience is that manufacturers do what they need to in order to sell product.  What happens to prices in the short term is another matter, and the main motivation for my opening comment.  Overall though, I still like the law.  There were some absolutely abhorrent last minute additions allowing Sinema's private equity donors to continue getting utterly undeserved tax breaks, but they are more than balanced by ridding EV tax credits of the ridiculous 200K unit sales cap.  And I say that even though it's a short term negative for Polestar.

The House will take up the bill when it returns from recess this Friday, August 12th with swift passage expected.