Automakers say US Senate bill would jeopardize 2030 electric vehicle targets

A group representing General Motors (NYSE:GM), Toyota Motor (NYSE:TM), Volkswagen (ETR:VOWG_p) and other major automakers said a $430 billion bill approved by the US Senate on Sunday would jeopardize the US reaching its 2030 electric vehicle adoption goals.

"Unfortunately, the electric vehicle tax credit requirements would make most vehicles immediately ineligible for incentives," said John Bozzella, CEO of the Alliance for Automotive Innovation, adding that the bill "would also jeopardize our shared goal of 40-50% electric vehicle sales by 2030." The group warned on Friday that most electric vehicle models would not qualify for the $7,500 tax credit for US buyers under the bill. To qualify for the credit, vehicles would have to be assembled in North America, which would make some existing electric vehicles ineligible once the bill takes effect. The Senate bill imposes other restrictions to discourage automakers from using Chinese-made materials by gradually increasing the required percentage of battery components sourced in North America. After 2023, battery-powered vehicles with Chinese components would not be eligible for loans, while the supply of critical minerals would also be limited. Senator Joe Manchin, who pushed for the restrictions, said electric vehicles should not depend on foreign supply chains, while Senator Debbie Stabenow of Michigan said the credit was "unworkable". The bill creates a $4,000 tax credit for used electric vehicles. The package provides billions of dollars in new funding for electric vehicle production, as well as $3 billion for the US Postal Service to purchase electric vehicles and battery charging equipment. The new electric vehicle tax credits, which expire in 2032, will be limited to trucks, vans and SUVs priced no more than $80,000 and cars up to $55,000. Families with adjusted gross incomes of up to $300,000 will be eligible for the credit. The US House of Representatives aims to vote on the bill on Friday. President Joe Biden has set a goal for 2021 that electric and plug-in electric vehicles will account for half of new vehicle sales by 2030.