“A large number of middle-class Americans will be able to get this credit that would otherwise be blocked by the credit limit,” said Joe Britton, executive director of the Zero Emission Transportation Association, whose members include Tesla as well as charging equipment manufacturers. battery material suppliers and other companies related to the electric vehicle business. “It’s a big deal.”
Read more about Asia-US relations
- Countering China: In a bipartisan vote, the Senate passed a $280 billion bill aimed at building America’s manufacturing and technological advantage to counter China. It is the most significant intervention by the US government in industrial policy in decades.
- Taiwan: The Biden administration is increasingly concerned that China may try to move against the self-ruled island in the next year and a half — perhaps by trying to close the Taiwan Strait.
- Trade policy: The new trade deal announced by President Biden during a trip to Asia is based on two big ideas: containing China and moving away from a focus on markets and tariffs.
For the first time, used cars that are powered by batteries would qualify for a tax credit of up to $4,000. This is important because most people buy used rather than new cars. The average price of a new electric car has risen above $60,000, which is out of reach for many buyers even when considering the fuel and maintenance savings these vehicles provide.
Individuals earning more than $150,000 a year or couples earning $300,000 or more will not qualify for incentives for new electric cars. Income limits for the used car incentive are $75,000 for individuals and $150,000 for couples. The credits will not apply to sedans that sell for more than $55,000 and vans, pickup trucks and sport utility vehicles listed for more than $80,000.
“They are trying to drive adoption among middle class and lower class buyers and that is a good thing,” said Akshay Singh, a partner at accounting and consulting firm PwC who specializes in the auto industry. “That’s where most of the market is.”
The bill, more than 700 pages long, never mentions China. But several regulations appear designed to undermine that country’s influence over the electric vehicle supply chain while making it more difficult for would-be Chinese automakers to export cars to the United States.
As it stands, the 200,000-vehicle cap on tax credits would provide a competitive advantage to market newcomers like China’s BYD, which are expected to use electric vehicles to enter the U.S. market. They could take advantage of the credit, while Tesla, the Texas-based company, could not.
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