GMC Hummer electric vehicles on the production line at General Motors' Factory ZERO all-electric vehicle assembly plant in Detroit, Michigan, U.S., on Wednesday, Nov.
17, 2021. General Motors invested $2.2 billion in Factory ZERO, the single largest DETROIT (AP) - A tax credit of up to $7,500 could be used to defray the cost of an electric vehicle under the Inflation Reduction Act now moving toward final approval in Congress.But the auto industry is warning that the vast majority of EV purchases won’t qualify for a tax credit that large.That's mainly because of the bill's requirement that, to qualify for the credit, an electric vehicle must contain a battery built in North America with minerals mined or recycled on the continent.RELATED: Senate passes Inflation Reduction Act; House to vote nextAnd those rules become more stringent over time — to the point where, in a few years, it's possible that no EVs would qualify for the tax credit, says John Bozzella, CEO of the Alliance of Automotive Innovation, a key industry trade group.
As of now, the alliance estimates that about 50 of the 72 electric, hydrogen or plug-in hybrid models that are sold in the United States wouldn't meet the requirements."The $7,500 credit might exist on paper," Bozzella said in a statement, "but no vehicles will qualify for this purchase over the next few years."Watch Vice President Kamala Harris break the tie for a 51-50 vote to approve the Inflation Reduction Act.The idea behind the requirement is to incentivize domestic manufacturing and mining, build a robust battery supply chain in North America and lessen the industry's dependence on overseas supply chains that could be subject to disruptions.Production of lithium and other minerals that are.