Treasury Department releases final rules for clean vehicle, battery supply chain
On Friday, the U.S. Treasury Department and the Internal Revenue Service (IRS) released the final rules on clean vehicle provisions of the Inflation Reduction Act (IRA).
Along with the rules, the U.S. Department of Energy released guidance on battery manufacturing issues created by the Bipartisan Infrastructure Law (BIL).
Officials said the rules are lowering costs for consumers and creating a U.S. manufacturing boom in batteries and clean vehicles. More than $173 billion in private sector investment has been announced across the country in the clean vehicle and battery supply chain.
“President Biden’s Inflation Reduction Act has unleashed an investment and manufacturing boom in the United States. I’ve seen firsthand in Tennessee, North Carolina, and Kentucky how ecosystems have developed in communities nationwide to onshore the entire clean vehicle supply chain so the United States can lead in the field of green energy,” Treasury Secretary Janet L. Yellen said. “The Inflation Reduction Act’s clean vehicle credits save consumers up to $7,500 on a new vehicle, and hundreds of dollars per year on gas, while creating good-paying jobs and strengthening our energy security.”
The final rules provide definitions and rules regarding taxpayer and vehicle eligibility for clean vehicle credits. The rules also address critical minerals and battery components requirements and the Foreign Entity of Concern restriction were added to the clean vehicle credit by the IRA. The DOE’s guidance also provides clarity on the definition of Foreign Entity of Concern for 30D clean vehicle credit and the battery manufacturing grant program.
The release also clarified rules for transferring the 30D clean vehicle credit of up to $7,500 and 25E previously owned clean vehicle credit of up to $4,000 to registered dealers, making the credits available at the point of sale instead of when buyers file their taxes. Officials said researchers found that consumers prefer an immediate rebate, instead of a tax credit later. So far, more then 100,000 credits have been transferred at the point of sales, for an estimated $700 million in consumer savings upfront.
“Today’s actions from Treasury and DOE provide clarity and certainty to an EV marketplace that’s rapidly growing,” said John Podesta, Senior Advisor to the President for International Climate Policy. “The direction we’re headed is clear—toward a future where many more Americans drive an EV or a plug-in hybrid and where those vehicles are affordable and made here in America.”
