Commercial EV tax credits can be applied to consumer leases

The Inflation Reduction Act also imposes severe restrictions on the procurement of battery minerals and components, sets income and price caps for eligible vehicles, and seeks to phase out battery minerals or components in China. . However, Commercial Credit does not have consumer credit procurement limits.

Senator Joe Manchin, a Democrat who chairs the House Energy Committee, urged the Treasury Department to suspend implementation of the commercial and new consumer EV tax credits, urging “companies looking for loopholes. In response to the demands of He “prevents this dangerous interpretation from the Treasury Department from moving forward.”

Toyota Motor Corporation previously said, “The criteria for eligibility are lacking. [commercial credits] It could undermine the IRA’s goal of expanding domestic production of EV batteries and maintaining America’s energy independence. ”

The law removes the 200,000-vehicle limit per manufacturer that exempted Tesla and General Motors from the EV tax credit starting January 1. The IRS on Thursday released his first list of 2023 applicable EVs, which includes Ford Motor, Rivian, Stellantis and Nissan. Motor Corp. is an EV for consumer tax credits and plans to release a more comprehensive list by Saturday.

The Treasury Department announced on December 19 that it would delay the release of draft guidance on the necessary procurement of EV batteries until March. This means that some EVs that do not meet the new requirements may have a short window of eligibility in 2023 before the battery regulations take effect.

Half of the credit is contingent on at least 40% of the value of the critical minerals in the battery being extracted or processed in the United States or a country with a free trade agreement with the United States, or recycled in North America. It rises year by year.

The Treasury Department said Thursday that the definition of free trade agreements includes at least existing comprehensive trade with Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, South Korea and Mexico. He said it included an agreement. , Morocco, Nicaragua, Oman, Panama, Peru, Singapore.

The US may negotiate additional eligible free trade agreements with allies in the coming months. The Treasury Department said it would “evaluate newly negotiated agreements for proposed inclusion” when finalizing the EV rule.