The ID.4 EV did not initially qualify for tax rebates.
(Photo: IMAGO/ZUMA Wire)
new York According to the US Treasury Department, electric models from German automakers Volkswagen, BMW and Mercedes do not qualify for tax breaks of $7,500. The three manufacturers did not meet the new battery procurement rules and thus lost their right to the tax premium, the Ministry of Finance said on Monday.
The new rules are expected to come into effect on Tuesday. The foreign manufacturers Nissan, Hyundai and Volvo are also left empty-handed, as is the US pick-up start-up Rivian.
According to the publication, US automaker Tesla and most electric models from Ford and Stellantis will have their subsidy halved, while General Motors’ Chevrolet Bolt and Bolt EV electric cars will receive the full $7,500 tax credit.
The planned tax breaks are part of the $430 billion Inflation Reduction Act (IRA) to strengthen the USA as an industrial location. In order for customers to have access to the funds, various subsidy criteria must be met. For example, the vehicles must be assembled in the US and at least 50 percent of the value of the battery component must be domestically produced.
It had been expected that many foreign manufacturers would not receive any subsidies from the IRA program. As the Handelsblatt reported last week, models from the German premium manufacturers BMW and Mercedes-Benz do not meet the requirements.
BMW only produces two plug-in hybrids in North America, the X5 45e and the 330e. Both qualified for tax rebates under the previous regime, but not under the new one. The 330e falls out in view of the battery requirements, a spokesman said last week. According to the list that has now been published, this also applies to the X5 45e.
Guesswork at Volkswagen
At Mercedes-Benz, the EQS SUV produced in Tuscaloosa is above the price cap of the subsidy rules. The EQE SUV could qualify in terms of price in the cheapest variant, but has the problem that most of its materials do not come from North America.
There is a lot of guesswork about the situation at Volkswagen. The Wolfsburg-based company had firmly assumed that the hopeful ID.4, which was produced in Chattanooga, would benefit from the subsidies. Volkswagen North America boss Pablo Di Si made the appropriate statement at an event on Monday morning. Now, however, the ID.4 is not included on the US government’s first list.
“We’re pretty optimistic that the Volkswagen ID.4 will qualify for a federal tax credit,” a Volkswagen spokesman said on Monday afternoon when asked. “We are awaiting documentation from a supplier to determine eligibility for the loan.”
Group circles announced that the ID.4 is currently not on the list because Volkswagen had not submitted the necessary documents to the Ministry of Finance by last Friday. There is no binding deadline for the submission of the certificate, it says.
Other manufacturers are already planning to relocate production in order to benefit from the subsidies at least in subsequent years. The Korean manufacturer KIA emphasizes that it wants to move the production of our EV9 SUV from Korea to West Point, Georgia, in 2024.
With material from Reuters.
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