U.S. Senate Passes Climate Bill; EV Makers Fight for Tax Credit
2022.08.08 20:45
U.S. Senate Passes Climate Bill; EV Makers Fight for Tax Credit
By Michael Elkins
The United States Senate passed the climate, energy, and health care bill over the weekend, sending it to the House of Representatives for further approval. The bill invests an unprecedented $370 billion in energy and climate programs over the next 10 years. However, what has garnered most electric car makers’ attention is the revised federal tax credits for electric vehicle purchasers.
One of the modifications brought by this bill is that automakers like Rivian (NASDAQ:RIVN) or Lucid (NASDAQ:LCID) won’t be able to benefit from the $7,500 tax credits. Once the new provisions are signed into law, their vehicles in the current configuration would no longer be eligible.
The bill also requires that new electric vehicles meet stringent sourcing requirements for critical materials, the components of the battery, and final assembly to qualify.
Sen. Joe Manchin, who stalled earlier efforts to get these measures through, said he hopes the requirements will help scale up the U.S. domestic critical minerals supply chain.
“Tell (automakers) to get aggressive and make sure that we’re extracting in North America, we’re processing in North America and we put a line on China,” Manchin told reporters last week. “I don’t believe that we should be building a transportation mode on the backs of foreign supply chains. I’m not going to do it.”
Electric vehicle makers are working around the clock to ensure their customers receive the credit. Fisker Inc (NYSE:FSR), for example, immediately notified customers that their deposits will be transformed into non-refundable payments. This would offer anyone interested the chance to become a party with a “written binding document to purchase,” meaning the buyers could eventually get their $7,500 in 2022 to be used for the 2023 tax filings.
Rivian CEO, RJ Scaring has already received hundreds of emails from prospective buyers and pre-order holders, asking the company to follow Fisker’s example.
