Proposal for a new class of tax credits for electric vehicle production by the U.S. Department of Energy (DoE) [J. Phys. 61, 82 (2008)]
It’s one of a number of such announcements in recent months and years as automakers gear up to start producing more electric vehicles. Several automobile companies have announced battery plant construction in the last few months. The act limits tax incentives for electric vehicles to those that manufacture battery manufacturing and raw materials in the US.
The rules allow consumer tax credits for electric vehicles only if they meet stringent goals for US-based manufacturing of the vehicles themselves and their batteries. They place caps on the cost of the vehicles and the income of the buyers and also require US source for battery raw materials. Buyers can get full tax credits only if they, and the vehicles, meet the requirements.
“You will not fly hundred of kilograms of batteries around the world or put them on a ship,” he said. You are not going to do it. You’re gonna localize anyway.
Source: https://www.cnn.com/2022/10/20/business/bmw-chairman-ev-regulations/index.html
Protecting American Manufacturing: The Importance of Regulations and the Implications for American Autonomy and the Autonomous Vehicle Industry
Zipse said the IRA’s rules were pushing American manufacturing unneeded, and risked negative repercussions for the very American jobs they were designed to protect.
The IRA provides no benefit for vehicles, regardless of how “American made” they are, if they aren’t sold inside the US. More importantly, though, protectionist regulations attempting to wall off American-made vehicles for American buyers can spark retaliation, endangering valuable export business, said Zipse.
He said that you can’t make a regulation without taking into account the consequences from other regulators. I warn that we will get a regulation.
“The assumption that you can incentivize an industry which is completely from A to Z inside one region in the world, in such a complex industry, like the car industry is a wrong assumption,” he said.
Zipse also warned of the possible unintended consequences of regulations, like those in some US states and in Europe, that ban sales of non-zero-emission vehicles after a certain date. For one thing, it could mean overall industry sales will decline.
Not all consumers will be able to have electric vehicle chargers at home, Zipse said, so many could decide, instead, to keep their gasoline cars longer or buy used gas-powered cars.
Some automakers, like BMW competitors General Motors and Mercedes-Benz, are apparently not worried about that possibility of shrinking sales and have announced plans to go all-electric by a set future date. BMW has never said publicly that it intends to make only electric vehicles after any certain time.
He said that regulators should impose more stringent emissions restrictions while leaving it up to the companies to reach their targets, as regulators have done before. That approach hasn’t halted global warming yet.
This isn’t to suggest that the company isn’t spending a lot on EV, it’s just that they’re split up the bill with SAMSUNG for the Batteries factory in Indiana and the facility in Canada. But that’s not an unthinkably large investment compared to some of its peers: GM is spending a whopping $7 billion on one of its three EV battery factories in the works, Honda’s helping build a $4.4 billion plant in Ohio (and spending $700 million more to retool existing facilities), and Ford has announced it’s building three EV-related locations with a price tag of over $11.4 billion.
Stellantis, the company behind Fiat, Dodge, and Jeep, has announced that it plans to halt one of its plants and lay off 1,200 workers come February. Its reasoning? It has to make all those electric vehicles, and there is a dash of chip shortages.
It’s too early to say whether EVs are going to become a common scapegoat if the auto industry keeps carrying out layoffs, but now we have at least two companies trying to paint thousands of peoples’ livelihoods as the cost of the future. (EV-native companies like Tesla or Rivian, which have also had their own massive rounds of layoffs this year, don’t have that luxury.)