New US climate law poses problems for buyers

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Audi of America, Kia and Porsche are warning U.S. buyers of their electric vehicles that they will lose access to up to $7,500 in federal tax credits once President Joe Biden signs the $430 billion climate and health bill into law, according to Reuters.

Audi, a division of the Volkswagen Group, said only the plug-in hybrid electric model will keep its existing federal credit for the rest of the year. According to the company, the legislation that was passed by Congress “will have a significant impact on our business and on our consumers”.

The bill makes any electric vehicle assembled outside North America ineligible for tax credits, which has drawn criticism from the European Union, South Korea and many automakers. The bill allows credits for customers with binding contracts for vehicles that have not yet been delivered when Biden signs the legislation.

Kia said in a letter to its US dealers that the law means all its electric and plug-in vehicles will no longer qualify for tax credits once it is signed, unless customers have binding written contracts.

Kia urged dealers to contact customers on waiting lists to close contracts before Biden signs the law. The letter, which the company confirmed on Friday, called the “sudden change” in tax policy for electric vehicles “very disruptive to our business and, unfortunately, to our customers.”

VW-owned Porsche said on Friday that buyers of its Taycan and plug-in hybrid Cayenne and Panamera electric vehicles will immediately lose eligibility once the legislation is signed.

“For customers who have placed vehicles on order and are still awaiting delivery, their credit eligibility depends on the individual sales agreement, which is a matter between them and their independently owned and operated Porsche dealership,” said a carrier word of Porsche Cars North America.

The Alliance for Automotive Innovation, a trade group that represents VW, General Motors, Toyota Motor and Ford Motor, among others, said last week that 70 percent of 72 electric, plug-in hybrid and fuel cell models in the U.S. do not they will still be eligible after Biden signs the bill into law.

On January 1, when the new bill’s additional revenue and price caps, as well as essential battery and mineral supply rules, come into effect, “no one will qualify for the full credit when the additional supply requirements come into effect.” the group added.