Electric vehicles—including General Motors’ Bolt—are likely to lose a $7,500 federal tax credit from April 18, owing to tougher new rules on the sourcing of battery minerals and components.The U.S. Treasury Department is tightening rules for consumers to get a generous income tax credit for buying a new electric vehicle starting next month, setting a requirement that key components including battery materials be sourced mainly from within North America.
Automakers have so far been unsuccessful in persuading the Biden Administration to ease the requirements, given that very few of the raw materials and battery components required are currently produced within the U.S., Canada and Mexico. The IRA included that rule specifically to spur an entirely new domestic supply base for battery materials.
Incentives increase the appeal of battery-powered vehicles as they typically cost more than gasoline engine models. According to industry researcher Edmunds, the average transaction price for a new EV was $59,132 last month, compared to $47,680 for all vehicles.
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