Make electric cars affordable.
For the auto industry, one of the most important provisions in the climate law would eliminate a limit on the number of cars from each manufacturer eligible for the $7,500 tax credit that taxpayers receive for purchasing electric vehicles. Currently, the credits are being phased out after the manufacturer has sold 200,000 electric or hybrid electric vehicles.
Read more about relations between Asia and the United States
- Facing China: In a bipartisan vote, the Senate passed a $280 billion bill aimed at building America’s technological and manufacturing edge to counter China. It is the most significant US government intervention in industrial policy in decades.
- Taiwan: The Biden administration has grown increasingly concerned that China may try to move against the autonomous island over the next year and a half — perhaps by trying to close the Taiwan Strait.
- trade policy: The new trade deal that President Biden announced during a trip to Asia is based on two big ideas: containing China and moving away from focusing on markets and tariffs.
Getting the credits back would be huge for Tesla and General Motors, which have exhausted their stakes, as well as companies like Ford Motor and Toyota that will soon lose access to the credits. The new tax credit, available until 2032, would make cars from those companies more affordable and counter criticism that only the rich can buy electric cars.
Joe Britton, CEO of the Zero Emission Transportation Association, whose members include Tesla as well as charging equipment manufacturers, battery material suppliers and other companies associated with the electric vehicle business. “This is a big problem.”
For the first time, used battery-powered cars are eligible for a tax credit of up to $4,000. This is important because most people buy used cars rather than new ones. The average price of a new electric vehicle has risen to more than $60,000, out of reach for many buyers despite the fuel and maintenance savings those vehicles offer.
Individuals who earn more than $150,000 a year or spouses who earn $300,000 or more will not qualify for incentives for new electric vehicles. Income limits for used car incentives are $75,000 for individuals and $150,000 for married couples. The credits will not apply to sedans selling for more than $55,000 and minivans, pickups, and SUVs listed for more than $80,000.
“They’re trying to drive adoption among middle- and lower-class buyers, and that’s a good thing,” said Akshay Singh, partner at accounting and consultancy firm PwC that specializes in the auto industry. “This is where the bulk of the market is.”