US Democrats Senator Chuck Schumer and Senator Joe Manchin have agreed to propose repealing a tax credit plan that favored American-made electric vehicles. Instead, the Senate Majority Leader and the West Virginia moderate are proposing an amendment to US President Joe Biden’s climate and health bill that would extend the credits across North America. The amendment includes an expansion of the $7,500 U.S. consumer credit previously limited to U.S.-made “clean vehicles,” which include battery electric vehicles, plug-in hybrids and hydrogen fuel cells. There’s also a new $4,500 credit for used EVs and a new $10 billion investment tax credit for building clean technology manufacturing facilities, according to a summary from Schumer’s office. To be eligible for the credits, the amendment would also require that vehicle batteries contain a certain percentage of material sourced from US free trade partners and that the retail price be capped at $55,000 for new cars and $80,000 for trucks, SUVs and vans. Canada’s International Trade Minister Mary Ng welcomed the change. “This is good news for Canadian workers, jobs and our manufacturing industry,” she said in a statement. “This is good news for Canadian workers, jobs and our manufacturing industry,” said Mary Ng, the minister responsible for economic development, international trade and small business and export promotion. (Adrian Wyld/The Canadian Press) “As the bill moves through Congress, we will continue to support the importance of maintaining these integrated supply chains and developing a greener and more prosperous future for North America.” To qualify for the credit, consumers must earn no more than $150,000 if they apply for the tax credit individually, or $300,000 for joint filers. For used cars, the eligibility limit is $75,000 and $150,000, respectively.
A vote in the Senate is expected next week
The move was expected to please automakers such as General Motors, Tesla and Toyota, which have expanded their electric vehicle manufacturing and criticized the Buy American bill when it was first proposed last year. Under the amendment, the credit will no longer be limited to manufacturers with sales of 200,000 EVs or less. The legislation is still a long way from being passed. Schumer said the US Senate is expected to vote on the proposed legislation next week and it will then go to the Democratic-controlled House of Representatives. It is sure to anger Senate Republicans, who will be reluctant to hand Democrats a legislative victory with midterm elections looming in November. Manchin is a key vote in the evenly divided Senate, but the bill will still need 60 votes to avoid Republican filibuster tactics. BREAKING The trade war was averted by the crazy proposed 🇺🇸 EV Tax Credit that excluded illegal 🇨🇦 vehicles. The new Democratic Senate package with Many of us spent a LOT of time on it. 💪 pic.twitter.com/ze6h2jgr0w —@FlavioVolpe1 The bill also includes $2 billion in cash grants to renew existing auto manufacturing facilities “to build clean vehicles, ensuring auto manufacturing jobs remain in the communities that depend on them.” If it becomes law, it would provide up to $20 billion in additional loans to build new clean vehicle manufacturing facilities and $30 billion in additional production tax credits “to accelerate U.S. manufacturing of solar panels, wind turbines, batteries and critical minerals.”
