Biden Poised to Finalize New EV Tax Credit Rules
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The U.S. Treasury Department will unveil the final version of new rules limiting a popular tax credit for electric car buyers as soon as May 3 as the Biden administration races to complete regulations ahead of the November election, according to people familiar with the matter.
The rules, proposed by the administration in December, put new limits on a credit worth up to $7,500 per vehicle, a powerful incentive for drivers interested in electric cars but put off by their high prices. The requirements don’t allow tax breaks for vehicles containing battery components or critical minerals from “foreign entities of concern” — government-speak for businesses controlled by US geopolitical foes such as China.
The rules were the subject of fierce lobbying by automakers such as Tesla Inc., General Motors Co. and Toyota Motor Corp. Even in their proposed form, they’ve had an effect. The restriction on battery components kicked in on Jan. 1 and sharply cut the number of vehicle models eligible for the tax credit. The critical minerals restriction is scheduled to take effect in 2025.
The move comes as the window to finalize regulations to make them less vulnerable to repeal if President Joe Biden loses re-election in November is set to close before the summer.
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