New year, new rules: As of January 1, things are about to get a little easier when it comes to getting your federal tax credit for buying an electric vehicle. Now the rebate – which is up to $7,500 for new EVs that qualify, and up to $4,000 for used EVs that qualify – is available immediately when you purchase your car, rather than needing to wait potentially months to file a claim with your tax return. And auto dealers are signing up in droves with the IRS.
To help gear up for the insta-credit program, more than 7,000 car dealers have signed up with the Internal Revenue Service to ensure they can offer the point-of-sale rebate to EV buyers starting January 1 – that accounts for nearly half of all new car dealerships in the US, reports Automotive News.
On paper at least, EV buyers pay a reduced fee upfront, while the dealer handles the paperwork with the IRS, and then the EV buyer happily gets behind the wheel and drives away.
Of course, the number of vehicles that qualify for the full rebate, or any rebate, will shrink starting January 1 as well, as President Biden’s new restrictions on electric vehicles and battery sourcing will kick in. To qualify at all, vehicles have to be manufactured in North America with an MSRP under $80,000 for an SUV and $55,000 for a standard or smaller car.
Vehicles can qualify a federal tax credit of $3,750 if automakers adhere to specific guidelines on sourcing battery materials. To get the rebate, 40% of the value of critical minerals used in the battery need to be extracted or processed in the US, or in a country that is a US free trade agreement partner, or they must have been made from recycled materials in North America. Also, a vehicle will qualify for an additional $3,750 if 50% of the value of critical battery components are manufactured or assembled in North America. Those percentages will go up every year until the credit expires in 2032. Additionally, all EVs that contain any battery components from a foreign entity of concern (as in China) will be excluded in 2024, and that rule applies to battery minerals as of 2025.
We’ll get the final word on exactly which vehicles are eligible in January, according to the report. Still, the Ford F-150, Chevrolet Bolt, Jeep Grand Cherokee 4xe, Jeep Wrangler 4×3, Rivian R1S and R1T, and maybe the Volkswagen ID.4 are likely to still be eligible for a $7,500 credit in 2024. Tesla’s Long Range and RWD Model 3 variants will no longer qualify, nor will Ford’s Mustang Mach-E, Chevrolet Blazer EV, or the Cadillac Lyriq.
Electrek’s Take
Automobile dealers have, of course, been highly vocal opponents of the transition to electric vehicles, for a host of financially driven reasons, some of them of course justified if you didn’t care at all about carbon emissions. EVs require less maintenance, meaning a cut in after-sales profits, and staff needs to be educated on how to chat up customers about batteries and range, charging infrastructure needs to be installed, etc. Last month, nearly 4,000 car dealerships in the US wrote a letter to President Biden pleading that the government put the brakes on its adoption of EVs, saying customers aren’t interested in buying them and that electric vehicles are piling up on their lots – which left out the detail that new vehicles of all types are piling up as well. So yeah, opposition has been fierce. But maybe this new strategy will shake things up and give dealers a morale boost. It’s an easy incentive for customers to choose an electric vehicle, and this could help more some inventory around to free up space for new vehicles.
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In a move that’s expected to play a crucial role in supporting the transition to medium- and heavy-duty electric vehicles, $100 million of the Biden Administration’s last-minute $635M payout is headed to Illinois to help build out an electric truck charging corridor.
Tesla is understood to have requested fully 40% of the $100MM award, with Prologis requesting $60 million, Gage Zero requesting $16 million, and Pilot requesting $10 million.
The project will facilitate the construction of 345 electric truck charging ports and pull-through truck charging stalls across 14 sites throughout Illinois, with each of the awarded companies putting up some of its own money to support the infrastructure buildout as well. To that end, Prologis is expected to invest $18 million, Tesla $19 million, Gage Zero $4 million, and Pilot travel stations committing $2.5 million.
“Most of the development has happened on the coasts, and there’s nothing really happening in the Midwest, which is not great for long-haul trucking,” said Megha Lakhchaura, Illinois’ state EV officer. “We think that this hub could be of national importance.”
The California Air Resource Board (CARB) has withdrawn its request to enact the proposed Advanced Clean Fleets rule, which required fleets that are “well-suited for electrification” to reduce emissions through the phase-in of Zero-Emission Vehicles (ZEVs) and the banning of commercial diesel sales after 2035.
“Frankly, given that the Trump administration has not been publicly supportive of some of the strategies that we have deployed in these regulations, we thought it would be prudent to pull back and consider our options,” CARB chair Liane Randolph said in an interview. “The withdrawal is an important step given the uncertainty presented by the incoming administration that previously attacked California’s programs to protect public health and the climate and has said will continue to oppose those programs.”
Here’s hoping the BEVs and ZEVs have better luck next round.
Electrek’s Take
While some may celebrate the delay of the Advanced Clean Fleets rule, their celebrations will undoubtedly prove to be myopic and short-lived. The reality is that America is no longer the world leader in technology or transportation that backward organizations like the American Trucking Association believe it to be, and the fact is that delaying a transition to cleaner, more efficient technology will only put the US further behind its economic rivals in Asia and the Middle East.
Even before this Pyrrhic victory for American truck brands that have been slow to push BEVs into production, demand for diesel was at a generational low, and companies like Volvo, Renault, and Mercedes-Benz have been logging millions of electric miles on their deployed trucking fleets.
All of which is to say: if you thought it was going to be hard for American brands to catch up before, it’s going to be even harder now.
In an official announcement released at 8:15PM last night, Walmart-backed electric van company Canoo filed a voluntary petition for relief under Chapter 7 of the US Bankruptcy Code and will cease operations immediately.
“We would like to thank the company’s employees for their dedication and hard work,” said Tony Aquila, Canoo CEO and one of the company’s largest investors (according to the press release). “We know that you believed in our company as we did. We are truly disappointed that things turned out as they did. We would also like to thank NASA, the Department of Defense, The United States Postal Service (‘USPS’), the State of Oklahoma and Walmart for their belief in our products and our company. This means a lot to everyone in the company.”
As a result of the chapter 7 filing, Canoo will cease operations effective immediately, 8:15PM on 17JAN2025. The next step in the company’s dissolution will see a court-appointed trustee manage the liquidation of the company’s remaining assets.
Electrek’s Take
Rumors fueled by outspoken former employees of Canoo began circling late last year, with furloughed employees urging Oklahoma state leaders to “hold the electric vehicle company accountable” after it shuttered the OK production line that had received more than $100 million in state incentives.
The same employee claims that the company was being wildly mismanaged, and that what few Canoo vehicles the company said it had built in the Oklahoma plant were actually built in Texas, and that no vehicles were actually ever built in OK. “Nothing was functioning,” the unnamed employee said, speaking to local news channel KFOR. “There was no, there was not one robotics line that actually worked to fabricate a part.”
You could argue that the employees should also be held accountable for happily collecting paychecks without actually producing anything this whole time, but that’s a conversation for another day. For now, I’ll be mourning the loss of what could have been a fun little domestic off-roader, and hoping Canoo’s employees find a soft landing and better jobs elsewhere.