Purchasers of a majority of electric vehicle models would not be eligible for a tax credit of $7,500 as part of a Democratic proposal in the US Senate.
That’s according to a group of major automakers.
Automakers have been personally concerned about the proposal’s requirements for vehicle batteries and critical mineral content to come from the United States.
The senators’ July 27 proposal Chuck Schumer and Joe Manchin would render 70% of U.S. electric, plug-in hybrid and fuel cell vehicles ineligible when they pass, according to John Bozzella, head of the Alliance for Automotive Innovation.
The group represents General Motors, Toyota Motor and Ford Motor among others.
“None would be eligible for full credit when additional sourcing requirements come into effect,” he said.
car manufacturers want changes to the proposal, which is part of a larger bill on drug prices, energy and taxes.
Without the tax credit, vehicles become more expensive for American consumers.
President Biden aims for half of all new vehicles sold to be electric or plug-in hybrid models by 2030.
Analysis by the Congressional Budget Office on Wednesday suggested that only 11,000 new electric vehicles would use the credit in 2023.
Manchin and Schumer’s offices did not immediately comment. The The Senate could vote from Saturday on the bill.
The bill includes increasing requirements for the percentage of battery components sourced from North America based on value. After 2023, it would ban batteries with Chinese components.
The group would prefer to see a phased introduction of battery components, critical minerals and final assembly requirements.
Reuters contributed to this report.