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Climate Bill ‘Transformative’ for Auto and Energy Industries

“A large number of middle-class Americans will be able to get this credit that would otherwise have been blocked because of the credit line,” said Joe Britton, executive director of the Zero Emission Transportation Association, which includes Tesla as well as charging equipment manufacturers, battery materials suppliers and other companies. associated with electric vehicles. “That’s a big problem.”

For the first time, battery-operated used cars are eligible for a tax break of up to $4,000. That’s important because most people buy used, not new, cars. The average price of a new electric car has risen above $60,000, beyond the reach of many buyers, even when factoring in the fuel and maintenance savings these vehicles deliver.

Individuals earning more than $150,000 a year or couples earning $300,000 or more are not eligible for new electric car incentives. The income limits for the used car incentive are $75,000 for individuals and $150,000 for couples. The credits would not apply to sedans selling for more than $55,000 and vans, pickups and SUVs worth more than $80,000.

“They’re trying to boost adoption among middle-class and lower-class buyers, and that’s a good thing,” said Akshay Singh, a partner at accounting and consulting firm PwC that specializes in the automotive industry. “That’s where most of the market is.”

The bill, over 700 pages long, never mentions China. But several provisions appear to undermine that country’s grip on the electric vehicle supply chain, while making it more difficult for emerging Chinese automakers to export cars to the United States.

As it exists, the 200,000 vehicle cap on tax credits would provide a competitive advantage for new entrants to the market, such as BYD of China, who are expected to use electric vehicles to enter the US market. They could have taken advantage of the credit while Tesla, the Texas-based company, couldn’t.

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