Anyone that’s attempting to keep up with all of the changes with the federal tax credit for electric vehicles is sure to have gray hairs at this point. So much has changed that it takes a degree to keep up with. The United States and the European Union are currently holding negotiations to, hopefully, expand the number of vehicles that are eligible for the federal tax credit and make things a little easier for shoppers.
According to The White House, the U.S. and the European Union are holding discussions that focus on the components that go into a battery pack. The goal is to come to an agreement to include critical minerals that are extracted or processed in the European Union to count toward the current requirements for electric vehicles to be eligible for the federal tax credit under the current Inflation Reduction Act.
“To that end, we intend to immediately begin negotiations on a targeted critical minerals agreement for the purpose of enabling relevant critical minerals extracted or processed in the European Union to count toward requirements for clean vehicles in the Section 30D clean vehicle tax credit of the Inflation Reduction Act,” stated The White House in a press release.
If negotiations go well, this could be greatly beneficial for consumers looking to purchase an electric vehicle, because it would expand the number of cars that are eligible for the $7,500 federal tax credit. That would lead to more people making the switch to an EV.
Under previous guidance that the government put out, EVs have to meet some requirements to be eligible for the tax credit: the EV has to have a final assembly point in North America, an EV has to have a minimum percentage of critical minerals that have to be extracted or processed in the U.S. or have minerals that come from one of America’s free trade partners or be recycled in North America, and an EV has to have a minimum percentage of battery components that are assembled or manufactured in North America.
A lot of automakers have voiced criticism against the current requirements in the Inflation Reduction Act. Brands like Hyundai and Kia got screwed over with the requirements, so hearing that the U.S. government is flexible and open to making changes could be a good sign for other countries and automakers.
While this is good news for shoppers, the U.S. government is supposed to have all of its guidelines on the federal tax credit in place this month. So, things could change for buyers very shortly.
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