Analysis is still emerging over last Sunday’s U.S. Senate passage of a far-reaching climate, energy and health care bill that will spend an unprecedented $370 billion of taxpayer money on energy and climate programs over the next decade. Among the bill’s many pages are incentives to support electric vehicles.
This is important since Gov. Brian Kemp, Economic Development Commissioner Pat Wilson and his team landed two big electric vehicle companies to locate in Georgia that will provide additional jobs along with the vehicles.
The new bill, which includes other health and tax-related provisions, seeks to force people to surrender their gasoline-fueled cars for electrics by offering a tax credit of up to $7,500 for new electric vehicles and up to $4,000 for used electric vehicles through 2032. But, as we were reading the publication The Conversation, its researchers found there’s a catch: The legislation could end up making it difficult for most EVs to qualify for the new incentive.
The Conversation underscores that the bill, which needs House approval that could come today, “requires that new electric vehicles meet stringent sourcing requirements for critical materials, the components of the battery, and final assembly to qualify for the tax credits. While some automakers, like Tesla and GM, have well-developed domestic supply chains, no electric vehicle manufacturer currently meets all the bill’s requirements.”
Georgia’s two Democratic U.S. senators—Raphael Warnock and Jon Ossoff– voted for the revised EV tax credits. They may have made a mistake, critics say.
Existing U.S. policy allows credits for the first 200,000 electric vehicles a manufacturer sells. Those credits helped jump-start demand for EVs. But The Conversation explains that industry leaders– including Tesla and GM– have already hit that cap, while most foreign automakers’ vehicles are still eligible. “The bill would eliminate the cap for individual automakers and extend the tax credits through 2032 – for any vehicle that meets the sourcing requirements,” it notes.
By the way, Communist China dominates the global supply chain for key materials and lithium batteries used in electric vehicles. In recent years its Communist leaders adopted aggressive policies that have supported advanced battery technologies, including investments in mines, materials processing and manufacturing. Some Republican and Democratic lawmakers in Congress are beginning to notice– and be concerned. That’s why it will be interesting if the slim Democratic majority controlling the U.S. House will pass the Senate version with its EV provision, as it is scheduled to do today.
