Biden to Sign the Bill Cutting Most Existing EV Credits on Tuesday

US President Joe Biden will sign legislation on Tuesday that would eliminate electric vehicle tax credits for most models currently effective up to $7,500.

The White House said Biden will sign legislation on Tuesday to approve a $430 billion climate, health and tax bill. The bill restructures the existing $7,5000 new electric vehicle tax credit and creates a new $4,000 deduction for used electric vehicles. It also includes tens of billions of dollars in new loans, tax credits and grant programs for automakers to build cleaner vehicles. Many automakers and dealers are working to finalize binding written contracts with customers ahead of Biden's signature, allowing them to qualify for the credits even if they have not taken delivery of the vehicles. The Alliance for Automotive Innovation, a trade group representing Volkswagen (ETR:VOWG_p), General Motors Co (NYSE:GM), Toyota Motor (NYSE:TM) and Ford Motor (NYSE:F), among others, said earlier that the legislation would render 70% of the 72 US electric, plug-in hybrid and fuel cell EVs currently eligible ineligible with Biden's signature. On January 1, when the bill's new revenue and price caps and battery and critical mineral sourcing rules take effect, "none will qualify for full credit once the additional sourcing requirements take effect," the group added. According to an estimate by the Congressional Budget Office, 11,000 new electric vehicles are projected to receive tax credits in 2023, assuming $7,500 per vehicle. Audi of America, Kia Corp and Porsche said on Friday that buyers of electric vehicles would lose access to federal tax credits if Biden signs it. Audi said only its Audi plug-in hybrid electric vehicle would retain its existing federal credit through the end of 2022. The bill makes all electric vehicles assembled outside North America ineligible for tax credits, which has drawn criticism from the European Union, South Korea and many automakers. GM and Tesla (NASDAQ:TSLA) had previously reached the 200,000 vehicle limit and were no longer eligible, but will be eligible again starting January 1 under stricter sourcing and revenue rules.