Many electric vehicles to lose big tax credit with new rules

Fewer new electric vehicles will qualify for a full $7,500 federal tax credit later this year, and many will get only half that, under rules proposed Friday by the U.S. Treasury Department, the Associated Press reports.

The rules, required under last year’s Inflation Reduction Act, are likely to slow consumer acceptance of electric vehicles and could delay President Joe Biden’s ambitious goal that half of new passenger vehicles sold in the U.S. run on electricity by 2030.

Biden’s administration concedes that fewer electric vehicles will be eligible for tax credits in the short term because of the rules, which set standards for where EV battery parts and minerals come from. But it says that, over time, more EVs and parts will be manufactured in the U.S., creating a domestic supply chain and more jobs. The credits and other measures also will end dependence on China for parts and minerals, which it now dominates.