Yup and after Dec 31 2023, a vehicle is no longer defined as a “new clean vehicle” and is disqualified from the credit entirely if it contains any battery components from China, Russia, North Korea, or Iran, and that’s on top of the domestic or free-trade partner % component and critical mineral requirements.Dec 2023 should be another interesting month, the IRA has a provision that in 2024 the credit will be at the 'Point of Sale', I would imagine that those who are about to take delivery in Dec might want to push that to Jan to get the credit upfront vs waiting for tax season.
Who knows what manufacturers are working on right now and how feasible it is, but I’d expect far fewer vehicles to qualify for the credit in 2024.
After Dec 31 2024, a vehicle is additionally no longer defined as a “new clean vehicle” and is disqualified from the credit entirely if it contains any critical battery minerals from China, Russia, North Korea, or Iran on top of the domestic or free-trade partner % requirements increasing.
So a vehicle needs the following to qualify for the full credit in 2024 as a "Point of Sale" discount:
- Zero battery components from China, Russia, North Korea, or Iran.
- 50% of the value of critical battery minerals from the US or a country with a free-trade agreement with the US.
- 60% of the value of battery components from the US or a country with a free-trade agreement with the US.
- Zero battery components from China, Russia, North Korea, or Iran.
- Zero critical battery minerals from China, Russia, North Korea, or Iran.
- 60% of the value of critical battery minerals from the US or a country with a free-trade agreement with the US.
- 60% of the value of battery components from the US or a country with a free-trade agreement with the US.
People are massively over-optimistic about the impact of this legislation in terms of EV discounts, this is designed to bring the supply chain out of China and it will likely take many years.
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