US Treasury Signals Opening for Foreign Carmakers on EV Subsidy
The US Treasury Department signaled some imported cars will qualify for electric-vehicle tax credits in the Inflation Reduction Act, a move that could assuage Asian and European allies’ concerns about the sweeping climate legislation.
The Treasury sketched out its interpretation of content requirements for electric-vehicle tax credits Thursday, while delaying final rules until March so officials have more time to address the complexities of the law.
In a list of frequently asked questions, Treasury officials indicated that imported vehicles may qualify for a $7,500 consumer tax credit by leasing cars through a commercial EV clause in the law. Such a move could help foreign carmakers like Hyundai Motor Co., which has complained that their electric models were excluded from the subsidy because they don’t currently manufacture them in North America.
West Virginia Senator Joe Manchin, who provided Democrats a pivotal vote on the legislation, fought to include new limits on who could claim the tax credits, which he previously dismissed as “ludicrous.” He argued that without tough rules mandating manufacturing in the US and rules on content, the act would subsidize production in China and by other US adversaries.
The legislation, which provided a record $370 billion in spending to combat climate change, passed on a party-line vote.