EV tax credit likely to get updated with proposed battery source requirements
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The electric vehicle tax credit just got a little bit more complicated with the announcement of a highly anticipated proposal which would apply to the battery components of eligible EVs. Under the proposed rule, EV manufacturers must certify each eligible vehicle meets key battery sourcing and manufacturing requirements which were laid out in the text of the Inflation Reduction Act. Those requirements apply to a $7,500 tax credit. President Biden signed the act into law in August of 2022, but the Treasury Department delayed the battery requirement portion of the tax credit ahead of 2023. Under the proposed guidance, batteries for EVs must meet a "critical mineral requirement" to be eligible for $3,750 of the tax credit. For those applying for the tax credit on a vehicle purchased in 2023, 40% of the minerals contained in the vehicle's battery must have been extracted or processed in the U.S. or in a nation that
