Taxes Taxes Taxes
I had a chat with my personal accountant yesterday, and now I'm in the mood to discuss taxes. With April 18th just around the corner, who isn't thinking about tax season? Today, let's focus on tax credits associated with EVs. As we previously mentioned in another post, it was anticipated that changes to the rules regarding EV tax credits were on the horizon. Now, it seems those changes are indeed coming, and April 18th appears to be the pivotal date. Here is what is expected:
- At least 40% of the value of battery minerals must be mined, processed, or recycled in the U.S. or countries with which it has trade deals.
- This percentage will rise 10% each year until it reaches 80% after 2026.
- At least 50% of the value of battery parts must be manufactured or assembled in North America this year, with this requirement rising in subsequent years.
After April 18th, fewer EVs will qualify for the full $7,500 federal tax credit. Some expect the new rules to slow consumer adoption of electric vehicles, but the Biden administration officials argue that over time, more EVs and parts will be manufactured in the U.S., creating a domestic supply chain and more jobs. The minerals requirement is expected to be particularly challenging, as much of the lithium used in EV batteries currently comes from China. Do you think these new rules will help our hurt the adoption of EVs?