Climate law ‘transforms’ automotive and energy industries

“A large portion of middle-class Americans will be able to get this loan that would otherwise be blocked by the credit limit,” said Joe Britton, executive director of the Zero Emissions Transportation Association, of which Tesla is a member, as well as charging equipment manufacturers. battery material suppliers and other companies involved in the electric vehicle business. “It’s a big deal.”

For the first time, used battery-powered vehicles are eligible for a tax credit of up to $4,000. This is important because most people buy used cars, not new ones. The median price of a new electric vehicle has topped $60,000, which is out of reach for many buyers, even with the fuel economy and maintenance these vehicles provide.

Individuals earning more than $150,000 a year or couples earning $300,000 or more are not eligible for new electric vehicle benefits. The income limits for the used car incentive are $75,000 for individuals and $150,000 for couples. Credits will not apply to sedans that sell for more than $55,000, and vans, pickups, and SUVs that cost more than $80,000.

“They are trying to attract middle and lower class buyers, which is a good thing,” said Akshay Singh, a partner at automotive accounting and consulting firm PwC. “That’s where most of the market is.”

The bill, which is over 700 pages long, never mentions China. But some of the provisions appear to be designed to undermine that country’s grip on the electric car supply chain while making it harder for up-and-coming Chinese automakers to export cars to the United States.

If it exists, the 200,000-vehicle cap on tax credits would provide a competitive edge to market newcomers like China’s BYD, who are expected to use electric vehicles to enter the US market. They could benefit from the loan, while Tesla, a Texas company, could not.