U.S. Car Brands Will Benefit Most From Electric Vehicle Tax Breaks

Tesla had already told potential buyers that the least expensive version of the Model 3 sedan would qualify for only half the credit, or $3,750. This month, Tesla cut the price of that car by $1,000 to $41,990. After the partial credit is accounted for, the car will effectively cost many buyers a little more than $38,000, about as much as a top-of-the-line Honda Accord and cheaper than an entry-level BMW 3 Series sedan.

Other versions of the Model 3 and Model Y S.U.V. will continue to receive the full credit. Tesla sold more electric vehicles in the United States last year than all other carmakers combined, according to Kelley Blue Book.

Some auto executives have said the rules are too restrictive and undermine efforts to limit climate change. Other critics, like Senator Joe Manchin III, Democrat of West Virginia, have complained that the Biden administration’s rules are too lenient.

Administration officials have argued that the regulations strike a balance between promoting electric vehicles and building a domestic supply chain.

By the administration’s count, besides the 10 vehicles that qualify for the full credit, seven qualify for half the credit. Vehicles can qualify for half the credit if, for example, their battery components come from the United States, Canada or Mexico but the minerals used to make the batteries do not meet the sourcing requirements.

Article source: https://www.nytimes.com/2023/04/17/business/electric-vehicles-tax-credits.html