If you’re in the market for a new car, wouldn’t you be more likely to buy a climate-friendly electric model if you could save thousands of dollars off the sticker price?
That’s the idea behind generous electric vehicle subsidies authorized as part of the Inflation Reduction Act passed by Congress last year, which are supposed to accelerate the fight against climate change by making zero-emission cars more affordable. But that’s a far cry from what’s likely to happen. Under complicated new rules released Friday by the Treasury Department, only a handful of more than 90 electric car models for sale in the U.S. will be eligible for incentives that allow car buyers to claim a tax credit of up to $7,500.
For that you can thank U.S. Sen. Joe Manchin III, D-W.Va. Restrictions on sourcing battery parts and critical minerals were added to the legislation in order to win his support and, at least theoretically, encourage domestic manufacturing and reduce the electric vehicle supply chain’s dependence on China. Since Jan. 1 vehicles have had to be assembled in North America and cannot cost more than $55,000 (or $80,000 for trucks and SUVs) to qualify for the full credit.
