Yahoo Finance New Electric Vehicle Regulations Could Reduce Tax Credits for Certain Tesla Models in 2024 — Will Others Be Affected?
If you’re pondering whether to buy an electric vehicle, now might be the time as some of the EV tax credits for certain brands will be slashed soon.
I’m a Mechanic: Here Are 8 Cars I Would Buy and Why They Are Worth It
Discover: 3 Things You Must Do When Your Savings Reach $50,000
Tesla, for instance, noted on a banner on its website that while customers who take delivery of a qualified new Tesla and meet all federal requirements are eligible for a tax credit up to $7,500, “reductions are likely for certain vehicles in 2024. Take delivery by 12/31 to qualify for full $7,500.”
Explore: These 7 Cars May Seem Expensive — but They Rarely Need Repairs
Some experts argued that by highlighting the soon-to-be slashed credits, Tesla was trying to boost orders for the final quarter of 2023.
Yet, Tesla’s notice comes on the heels of the Treasury Department’s Dec. 1 update on the Inflation Reduction Act credit rules involving “foreign entity of concern” requirements, which include China, Russia, North Korea and Iran.
“An eligible clean vehicle may not contain any battery components that are manufactured or assembled by a FEOC,” according to the Treasury Department. And Tesla’s banner on its website would suggest that the automaker doesn’t believe it will meet the new requirements — something other EV companies might fall short of as well.
What Other EVs Could Be Affected?
Chinese automaker Geely owns approximately a 79% interest in Volvo, according to Green Car Report. In turn, some Volvo models and its spinoff brand Polestar might be affected by this despite U.S. assembly.
Steve Birkett, senior EV editor, FindTheBestCarPrice.com, noted that although there isn’t a full list from the Treasury covering which models will still qualify for the updated tax credit regulations, manufacturers are giving us hints.
“New electric vehicles from GM on the Ultium platform are likely to retain the full federal tax credit of $7,500,” he said.
According to Birkett, the Chevy Blazer EV and Chevy Silverado EV have both started to roll off U.S. production lines, and GM’s Ultium Cells plants are based in North America, positioning them well for federal tax credit qualification.
On the other hand, he noted that one of the most highly-anticipated EVs of 2024, the Volvo EX30, will unfortunately not qualify.
“Affordability is already good, with a starting price of $34,950, but the manufacturing links to Zhangjiakou, China, and Chinese automaker Geely owning Volvo removes it from eligibility,” he said. “The same is true of models from Polestar, such as the Polestar 2 fastback and the upcoming Polestar 3 premium SUV, if the latter remains above $80,000 in price and doesn’t ramp up U.S.-based production.”
Birkett added that probably the most significant EV falling off the eligible for tax credit list in 2024 is the Chevy Bolt EV, which will cease production on Dec. 20, putting an end to the only all-electric option that some buyers could access new for less than $30,000.
“This leaves a huge void in the affordable EV market, which was, after all, the primary objective of these federal incentives,” he said.
Other experts echoed the sentiment, saying that this will put a dent in EV adoption.
“With consumer spending slowing down, the phasing out of the EV tax credit is likely to cut into demand for EVs among the most price sensitive,” said Peter Cohan, associate professor of management practice at Babson College.
More From GOBankingRates
10 Places To Retire That Are Just Like Arizona but Way Cheaper
If You Find a Rare 'Doubled Die' Penny, It Could Be Worth $1.14 Million
This article originally appeared on GOBankingRates.com: New Electric Vehicle Regulations Could Reduce Tax Credits for Certain Tesla Models in 2024 — Will Others Be Affected?
