As originally reported by Automotive Fleet, this guidance effectively delays those eligibility restrictions in the $7,500 tax credit for new electric vehicles (EVs). Restrictions on sticker price and buyer income still take effect on January 1, 2023.
It won’t be until after the Treasury issues the proposed guidance that the critical mineral and battery component requirements take effect.
The department was required to issue proposed guidance by December 31 under the Inflation Reduction Act. The guidance will show how to meet the revamped EV tax credit eligibility rules.
The Treasury said it will release information before the end of the year that will outline the "anticipated direction" of the critical mineral and battery component requirements that new EVs must meet to qualify.
The information also will help automakers "prepare to be able to identify vehicles eligible for the tax credit when the new requirements go into effect," according to the Treasury.
The $7,500 tax credit for new EVs is delivered out in two halves for qualifying vehicles and buyers. One half is based on meeting battery component requirements to come from North America. The other half is based on critical minerals coming from the U.S. or free trade partners with no "entity of concern" sourcing from 2025.