New rules in battery materials in electric cars are shaking up the American automotive industry as intended. However, one Detroit staple joins Tesla in having federal tax credits slashed.
Related: Ford CEO responds to Elon Musk's offer of electric-vehicle help
Legacy automaker Ford said on Wednesday that it is "unlikely" that its Mustang Mach-E electric crossover SUVs currently available at its dealerships and showrooms will fall under this category in January 2024.
The Dearborn-based company told its dealers about the news via a bulletin and added that the restrictions by the U.S. Treasury department should be taken as "an excellent motivator to purchase [a Mustang Mach-E] before the end of the year," and that "This is a great time to reach out to customers in your pipeline to close the sale and ensure they are able to receive the credit."
Additionally, the automaker told dealers that incentives for buying or leasing 2023 model year Mach-Es and F-150 Lightning electric pickup trucks will be extended.
This news comes as the U.S. Treasury Department stated that EVs will not qualify for the full $7,500 federal tax credit if they contain "any battery components that are manufactured or assembled" by a "foreign entity of concern (FEOC)."
According to the Department of Energy, FEOCs include Russia, Iran, North Korea and China. Chinese firms are responsible for a large portion of the mining and refining of raw materials, as well as the manufacturing of critical components needed for EV batteries.
“President Biden entered office determined to reverse the decades-long trend of letting jobs and factories go overseas to China,” said John Podesta, Senior Advisor to the President for Clean Energy Innovation and Implementation in a Dec. 1 statement. “Thanks to the Investing in America agenda and today’s important guidance from Treasury and the Department of Energy, we’re helping ensure that the electric vehicle future will be made in America.”
Ford's announcement follows a similar announcement made by Tesla (TSLA) -) on Dec. 4. According to their website, the standard rear-wheel drive and long range models of the popular Model 3 electric compact sedan will only be eligible for a $3,750 federal tax credit come January, while also urging potential customers to buy before said cuts come into effect.
More Business of EVs:
- A full list of EVs and hybrids that qualify for federal tax credits
- Here’s why EV experts are flaming Joe Biden’s car policy
- The EV industry is facing an unusual new problem
Ford (F) -) previously announced on Nov. 21 that it is scaling back on its plans for the Blue Oval Battery park in Marshall, Mich. The EV battery plant, which is still under construction, has previously come under fire by lawmakers, as they will use technology licensed by Chinese electric car firm CATL.
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