Most electric vehicles won't qualify for federal tax credit

[former9thward]

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.

And 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.

https://apnews.com/article/electric-vehicles-tax-credit-cfd3d9322230446f65d629b05c2ae551

[Historic NY]

1. Especially on the trucks

[JohnSJ]

2. Then the MSRPs on these vehicles should come down.

[former9thward]

3. It is going the other way.

Ford raises price of electric F-150 Lightning by up to $8,500 due to ‘significant’ battery cost increases

DETROIT – Ford Motor on Tuesday said it is increasing the starting prices of its electric F-150 Lightning pickup due to “significant material cost increases and other factors.”

The Detroit automaker said the price increases – between $6,000 and $8,500, depending on the model – will not impact customers who have ordered a vehicle and are awaiting delivery. They will affect an undisclosed number of reservation holders who have not yet ordered a truck.

The starting prices for the 2023 F-150 Lightning will now range from about $47,000 to $97,000, up from roughly $40,000 to $92,000 for the 2022 model year. Prices exclude taxes and shipping/delivery costs.

Ford is the latest automaker to increase pricing of their newest electric vehicles amid rising inflation and commodity costs. General Motors previously raised the price of its Hummer EV pickup by $6,250, while EV startups Rivian Automotive and Lucid increased the costs of their vehicles substantially more than that. Tesla also has raised pricing this year on its vehicles.

https://www.cnbc.com/2022/08/09/ford-increasing-price-of-electric-f-150-lightning-.html

[JohnSJ]

11. That price was raised before it was known what was in the bill. Regardless, these electric vehicles

are not for the common person

[tinrobot]

4. Simple - lower prices and build them here.

If manufacturers can do that, there's plenty of credits to be had.

[former9thward]

5. Not simple.

Russia and China control most of the raw materials for the EV batteries.

[tinrobot]

6. Actually, Australia and Chile produce the most lithium.

They're trade-friendly to the US. Sure, China imports a lot of it for heir production, but so can we,

https://www.visualcapitalist.com/sp/charted-lithium-production-by-country-1995-2020/

[former9thward]

8. A host of sites, including Yale University, disagree with you.

How Russia’s War Is Putting Green Tech Progress in Jeopardy

The European Union relies heavily on Russia to supply nickel and other metals for electric vehicle batteries and other renewable technologies. War-related price increases and shortages of these metals could hinder Europe’s drive to sharply cut emissions by 2030 and beyond.

https://e360.yale.edu/features/russia-ukraine-war-metals-electric-vehicles-renewables

How China Dominates Global Battery Supply Chain

After years of planning, China now dominates the world’s production of new generation batteries that are key to transitioning away from fossil fuels. These new batteries are essential for electric vehicles and most portable consumer electronics such as cell phones and laptops.

https://www.voanews.com/a/silicon-valley-technology_how-china-dominates-global-battery-supply-chain/6195257.html

[ProfessorGAC]

13. While True...

...that's not what the poster claimed. The claim was the lithium was produced mostly by Australia & Chile, and this Geological Survey article supports that.
https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-lithium.pdf#:~:text=LITHIUM%20U.S.%20Geological%20Survey%2C%20Mineral%20Commodity%20Summaries%2C%20January,accounted%20for%20the%20majority%20of%20world%20lithium%20production.

World Mine Production and Reserves: Reserves for Argentina, Australia, and “Other countries” were revised based
on new information from Government and industry sources.
Mine production Reserves6

United States W W 750,000
Argentina 5,900 6,200 2,200,000
Australia 39,700 55,000 75,700,000
Brazil 1,420 1,500 95,000
Chile 21,500 26,000 9,200,000
China 13,300 14,000 1,500,000
Portugal 348 900 60,000
Zimbabwe 417 1,200 220,000
Other countries — — 2,700,000
World total 982,500 9100,000 22,000,000

[lostnfound]

14. Lithium can be extracted from Salton Sea

https://www.cnbc.com/2022/05/04/the-salton-sea-could-produce-the-worlds-greenest-lithium.html

[former9thward]

15. Well, Chile not so much...

The Place With the Most Lithium Is Blowing the Electric-Car Revolution

A California-sized piece of South America is stifling production of the metal at a time when battery makers desperately need it

SALAR DE ATACAMA, Chile—Hailed as the Saudi Arabia of lithium, this California-sized chunk of terrain accounts for some 55% of the world’s known deposits of the metal, a key component in electric-vehicle batteries.

As the Chinese EV giant BYD Co. recently learned, tapping into that resource can be a challenge. Earlier this year, after BYD won a government contract to mine lithium, indigenous residents took to the streets, demanding the tender be canceled over concerns about the impact on local water supplies. In June, the Chilean Supreme Court threw out the award, saying the government failed to consult with indigenous people first.

“They want to produce more and more lithium, but we’re the ones who pay the price,” said Lady Sandón, president of one of two Atacameño indigenous hamlets that filed a lawsuit against the auction. A BYD spokeswoman declined to comment.

Similar setbacks are occurring around the so-called Lithium Triangle, which overlaps parts of Chile, Bolivia and Argentina. Production has suffered at the hands of leftist governments angling for greater control over the mineral and a bigger share of profits, as well as from environmental concerns and greater activism by local Andean communities who fear being left out while outsiders get rich.

https://www.wsj.com/articles/electric-cars-batteries-lithium-triangle-latin-america-11660141017?mod=itp_wsj&ru=yahoo

[uponit7771]

12. +1,

[crickets]

7. According to article, we have Manchin to thank for that. Naturally. nt

[former9thward]

9. Yes, of course.

And he put all sorts of fossil fuel helpers in the latest bill just passed.

[BootinUp]

10. Good to know, I still support the bill as it is. Get to work. nt

[Hortensis]

16. Googling reveals a LONG list of auto and battery companies investing aggressively

to meet the demand for domestically produced EV batteries. This is the Biden administration and congressional Democrats encouraging what is both necessary and possible. All the elements of the bills our Democrats are writing and passing are designed to (also) combat climate change.

Here's just one:

Automotive News: $13.5B committed to North American EV battery plants only scratches the surface
Automakers and battery companies are spending unprecedented sums of money as they build out North America's EV supply chain.

https://www.autonews.com/manufacturing/135b-committed-north-american-ev-battery-plants-only-scratches-surface

Meanwhile, apparently currently between a quarter and a third of available models already WOULD "meet the requirements." I presume that means all of them. We'll see how demand responds, but obviously supply thinks it already knows.

[former9thward]

17. Battery plants require raw materials.

That can not be created out of thin air no matter how much money is thrown at it. I have posted several links showing the supply chain problem.

[Hortensis]

18. Sure, but critically, they're all working on it now. A huge sea change

has occurred, so big that it will cause waves of huge changes, such as to obstacles to mining more minerals in North America and to commercial and national relationships with supplier nations. China may find it difficult to maintain a dominance it created when competition was less than intense. GE's not investing $4B in Orion for EV batteries that can't be built. And of course investments in future technology.

It's moving a needed direction, and for me that's the big point, not that we're unlikely to qualify for the entire current subsidy. Cars that do will usually be priced higher anyway, I'm pretty sure. But I do expect the world's industry and governments, but especially ours, to make this happen.

[jeffreyi]

19. Goodbye Thacker Pass.

Tragic.