New electric vehicle tax credits may not apply to current electric vehicles

We’ve spent a lot of time covering the passage of the massive climate and health care bill that Democrats have touted as a major step in the fight against climate change. Among many provisions, the legislation provides tax credits for electric vehicles.

So I was stunned to read in a CNN article that, according to an industry group, none of the electric vehicles currently available will be eligible for the full tax credit next year.

Companies will have to adjust their production to meet the demands of US vehicle production and battery supply. The hope is that these requirements will make the US economy more independent of China.

Additionally, revenue and price limits will reduce the eligibility of a large portion of the EV market.

These and other requirements were added to secure the critical vote of West Virginia Sen. Joe Manchin, who torpedoed the inclusion of more robust weather provisions in an earlier version of the bill and insisted on substantial changes. in subsequent negotiations.

Read Matt McFarland’s full report to see an overview of the complicated new rules around electric vehicle tax credits. I reached out to McFarland with a few follow-up questions about the effectiveness of these credits in changing American roads — something he said there was no perfect answer for.

WHAT MATTERS: What do we know about the time it will take for automakers to adapt to these new rules and bring more fully eligible vehicles to market?

MCFARLAND: It’s hard to know how long that will take. Depends on many factors. What changes are they (car manufacturers) making? How will the federal government assess qualifying vehicles? There are significant gray areas right now.

It could also be costly for automakers to make certain changes. So they will have to weigh the financial merits (of making cars eligible for EV credits).

WHAT MATTERS: What do we know how long it will take for these credits to drastically reduce the number of carbon-emitting cars on the road?

MCFARLAND: Electric vehicles are growing, but still represent such a small part of our fleet. A drastic change will take place in many years.

Gas prices are falling. It’s good news ?

The other thing that could hurt the adoption of electric vehicles is the fact that gasoline prices continue to fall from their record highs of early summer.

This is good news for consumers battling inflation, and possibly bad news for the environment.

The ups and downs of the economy are still incomprehensible.

Gasoline and diesel prices are falling. Natural gas is on the rise.
CNN’s Christine Romans calls it the economics of Dr. Jekyll and Mr. Hyde. The good guy, Jekyll, is winning this week, she wrote.

“That obsession with recession has faded a bit in the past 10 or so days amid continued signs of labor market strength, falling gasoline prices and hints that runaway inflation may be hitting. a spike,” writes Romans.

Lower gasoline prices allow consumers to spend more. They are frugal to get more for their money.

But she notes that polls still show that “the public feels pretty bad about the economy.”

So far, it has been high-income earners who could be driving the continued strength in consumption – so it is, as always, uneven.

The metaphor used by CNN’s John King in ‘Inside Politics’ was that of a seesaw – mortgage rates are down in the short term, suggesting that inflation may be slowing, but home sales are also down .

CNN’s Matt Egan told King that home sales were down 30% in the south and west. But prices continue to rise, albeit more slowly, to $404,000, building on 10 straight years of rising home prices.

A burning question is how the cautious optimism that inflation is cooling and the economy has weathered the worst will affect the political situation.

A bit of optimism for Democrats for November

Before speaking to Egan, King spoke to Amy Walter, the editor of the Cook Political Report (and my former boss at another news agency).

She sees a bit more optimism for Democrats in November and notes that in polls during Senate races in particular, Democratic candidates are outperforming President Joe Biden’s dismal approval rating.

Cook’s political report changed its running notes to change the key Pennsylvania Senate race from “tossup” to “lean Democrat.”

She argued that the major political conversation about abortion this summer and the new focus on former President Donald Trump could hurt Republicans in November.

“The focus has been almost entirely on Republicans, and not in a good way,” Walter said.

Republicans still hold a historic advantage heading into the midterm elections, when the president’s party almost always loses a few seats — and Democrats hold only the slimmest of majorities in the House and Senate. The end result could be simple majorities for Republicans after November, rather than the bombings some Democrats fear.

“We see a hint of optimism creeping in, in terms of voters’ views on the economy,” Walter said. “It’s not going to change overnight. But at least if the trend line is in the right direction, it’s good for the Democrats. The more Donald Trump in the spotlight, it’s also good for the Democrats .”

Trump will be in the spotlight to some extent as Election Day approaches. The Trump Organization goes on trial in October, and Trump, who has consolidated power within the party, continues to make headlines with the universe of legal issues surrounding him.

But the economy could be more Mr. Hyde by then, which could completely change the political equation.


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