U.S. House Introduces Bill Aiming To Kill EV Tax Credit

The current federal EV tax credit was introduced as part of former President Joe Biden’s Inflation Reduction Act (IRA) of 2022, offering electrified vehicle buyers as much as $7,500 off of those purchases. However, few models actually quality for the credit today due to increasing raw materials sourcing requirements, though many entities – including Ford and various automotive lobby groups – have called for politicians to retain it, regardless. Despite this, a group of lawmakers has been working to introduce legislation nixing the EV tax credit, and now, that’s precisely what has happened in the House of Representatives.

According to Reuters, a group of House Republicans has introduced a bill that proposes killing off the federal EV tax credit, as well as repealing fuel efficiency rules. If the bill passes, it would end the $7,500 new EV tax credit and $4,000 used credit at the conclusion of 2025, though automakers that haven’t sold 200,000 electric vehicles would continue to qualify for the credit for an additional year. Additionally, the bill is aiming to rescind existing corporate average fuel economy (CAFE) standards and greenhouse gas emission rules for 2027 and beyond.

One thing that the bill isn’t aiming to get rid of are battery production tax credits for automakers and battery makers, though it would add a provision that bars credits for vehicles that utilize components made by Chinese companies or using licensed technology from that country starting in 2027 – a major sticking point for Ford, which plans to utilize licensed lithium-iron phosphate (LFP) battery tech from China-based CATL at the under-construction BlueOval Battery Park Michigan site.

Of further concern to Ford is the fact that this bill is aiming to rescind unobligated funding that supports the manufacture of certain advanced technology vehicles. At the moment, Ford and SK On’s joint-venture, BlueOval SK, has an outstanding $9.63 billion loan that was finalized under Biden slated for the future BlueOval City and BlueOvalSK Battery Park sites.