Automakers Scramble To Decode New U.S. EV Tax Credits

U.S. automakers and dealers are scrambling to figure out if they can still offer $7,500 tax credits to would-be buyers of electric vehicles (EVs), as Congress prepares for final votes today on a bill that includes a top-to-bottom overhaul of Washington's clean vehicle policies.

Under the $430 billion climate, health care and tax bill that the House of Representatives is set to vote on Friday, rules governing the current $7,500 EV tax credit aimed at persuading consumers to buy the vehicles would be replaced by incentives designed to bring more battery and EV manufacturing into the United States.

Manufacturers, dealers and consumers do not have answers to many basic questions about how the new rules will affect the way clean vehicles aimed at consumers - including fully electric and hybrid models - will be bought, sold and built, automakers, consultants and lobbyists said.

However, industry executives were more positive about proposed incentives of up to $40,000 per vehicle for larger commercial electric vehicles, such as Tesla Inc's Semi or electric commercial vans developed by several manufacturers.

The provisions in the Inflation Reduction Act are "a powerful tail wind in the commercial space," said RJ Scaringe, chief executive of Rivian which has an agreement to deliver up to 100,000 large vans to shareholder Amazon.com Inc.

The legislation brings "a significant change in value chain requirements, in a very short period of time, that affects an industry where supply chain development ... is measured in years," said John Loehr, a managing director with consulting firm AlixPartners.