“A large portion of middle-class Americans will be able to get this credit that would otherwise have been blocked because of the credit limit,” said Joe Britton, executive director of the Zero Emission Transportation Association, of which Tesla is a member charger maker, Battery material suppliers and other companies related to electric vehicle business. “It’s a big deal.”
Read more about Asia-US relations
- Against China: In a bipartisan vote, the Senate passed a $280 billion bill aimed at expanding America’s manufacturing and technology lead over China. It is the most significant intervention by the US government in industrial policy in decades.
- Taiwan: The Biden administration is increasingly concerned that China may seek to crack down on the self-governing island over the next year and a half — perhaps by attempting to close the Taiwan Strait.
- Trade Policy: The new trade deal, announced by President Biden during a tour of Asia, is based on two big ideas: contain China and move away from the focus on markets and tariffs.
For the first time, used battery-powered cars would receive a tax credit of up to $4,000. This is important because most people buy used cars, not new ones. The median price of a new electric car has risen to over $60,000, which is prohibitive for many buyers, even considering the fuel and maintenance savings these vehicles offer.
Individuals making more than $150,000 per year or couples making $300,000 or more would not qualify for new electric car incentives. The used car incentive income limits are $75,000 for individuals and $150,000 for couples. The credits do not apply to sedans listed for more than $55,000, vans, pickups and sport utility vehicles listed for more than $80,000.
“They’re trying to encourage acceptance among middle-class and lower-class buyers, and that’s a good thing,” said Akshay Singh, a partner at PwC, an accounting and advisory firm that specializes in the auto industry. “That’s where most of the market is.”
The more than 700-page bill never mentions China. But several regulations appear aimed at undermining that country’s grip on the electric vehicle supply chain, while making it harder for emerging Chinese automakers to export cars to the United States.
As it stands, the 200,000-vehicle cap on tax credits would provide a competitive advantage for newcomers like China’s BYD, which are expected to adopt EVs to enter the US market. They could have benefited from the loan while Tesla, the Texas-based company, couldn’t.