The Vast Majority of Electric Vehicles on Sale Today Wouldn’t Qualify for Democrats’ Tax Incentives

August 1, 2022

The Schumer-Manchin compromise – better known as the “Green New Deal Lite” – is jam-packed with incentives to boost electric vehicle sales. However, most electric vehicles on the market today won’t even qualify for these incentives.

The Wall Street Journal editorial board writes: “The Schumer-Manchin tax bill’s rich electric-vehicle subsidies are a boon for auto makers, but they come with a hitch: It’s unlikely any electric vehicle on the market today would qualify for the $7,500 tax credit because of conditions in the bill on material manufacturing. This will be one policy where Democratic promises of permitting reform meet the road.”

Unless the Biden administration begins permitting several more critical mineral mines in the United States, it’s hard to see how future electric vehicle sales will qualify. Right now, the vast majority of the world’s critical mineral supply chains are dominated by China, and the batteries in today’s vehicles come from those supply chains.

The Journal continues: “To qualify for $3,750 of the credit, an increasing share of a vehicle’s battery minerals such as lithium and nickel must be extracted or processed in the U.S. or in a country with which the U.S. has a free-trade agreement, starting at 40% in 2023 and increasing to 80% in 2027. The other half of the credit will only be available for vehicles in which a majority of its battery components are made in North America, starting at 50% in 2023 and growing to 100% by 2029.”

Far-left environmental activists have vocally opposed the permitting of these mines in America. If Democrats and their green allies are serious about electric vehicles, they better start approving permits… fast.