General Motors says its electric vehicles will be eligible for the full $7,500 federal tax credit recently revised as part of President Biden’s Inflation Reduction Act in the next two or three years.
According to chief executive Mary Barra, the company’s EVs will initially be available for a $3,750 credit and that this will soon swell to the $7,500. To be eligible for the full credit, electric vehicles must be assembled in North America and contain batteries made from raw materials sourced from the U.S. or countries where the U.S. has free-trade agreements.
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“We think, out of the gate, we’re going to be eligible for the $3,750, and we’ll ramp to have full qualification in the next two to three years, getting up to the $7,500,” Barra told Bloomberg. “It just takes a couple of years to ramp up based on our expectations with the supply moves that we’ve already made.”
Once it is eligible for the full tax credit, GM’s work won’t end. From next year, 40 per cent of the minerals used in the batteries of its EVs need to be manufactured or assembled in the U.S. or through a free-trade partner but each year after, the requirement will increase by 10 per cent. Similarly, the percentage of battery components that need to be manufactured or assembled in North America will need to increase by 10 per cent each year after 2023.
Key to GM’s electric vehicle plans are the four battery plants it is building with its partner LG Energy. The company is looking to sell 1 million EVs in North America and China by 2025.