Starting January 1, some car models made by General Motors and Ford will be ineligible for electric vehicle tax credit. Recently, these giant car manufacturers announced what multiple car models are affected and the reason behind this temporary exclusion.

EV Tax Credit Discontinued

The two companies stated that some of their cars will become ineligible for electric vehicle tax credits in the U.S. Such situation will commence on Jan. 1, 2024. Two vehicles from General Motors will be impacted from this exclusion on tax credit. On Thursday, the company identified Cadillac Lyriq and Chevrolet Blazer that will temporarily lose electric vehicle tax credit.

Fox News provided details about this latest development in the EV sector.

Furthermore, General Motors shared that beginning Jan.1, only its Chevrolet Bolt EV will be eligible for the consumer EV credit. Meanwhile, as per Reuters report, the company stated the reason for such sanction. According to GM multiple car models are losing the credit due to their two minor components. The company stated it has pulled ahead sourcing plans for qualifying components early next year.

In line with this, GM expects to regain eligibility for its Lyriq and Blazer EV in the early part of 2024. Moreover, GM anticipates to receive full incentive for its other EVs namely Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV and Cadillac OPTIQ. Such expectation comes from the fact that it changed sourcing for components.

Reports stated the U.S. Treasury suggested severe requirements rejecting any EVs with foreign battery content, including low-value components, starting January 1.

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On the other hand, the E-Transit from Ford Motor will lose its $3,750 tax credit on the first day of 2024. The company also announced that its Mach-E and Lincoln Aviator Grand Touring plug-in hybrid will also be excluded from EV tax credit on Jan.1. But the good news is the F-150 EV Lighting will keep the $7,500 credit.

Lastly, the Lincoln Corsair Grand Touring is still eligible for a $3,750 credit. Aside from GM and Ford, Tesla will also face losing tax eligibility for some of its cars. These vehicles are the Tesla's Model 3 Rear-Wheel Drive and Long Range vehicles.

Biden's Administration: EV Tax Credit

The Biden administration seeks to stimulate electric-vehicle sales and drive automakers away from Chinese suppliers with hefty tax subsidies. A crucial EV battery material explains why doing both is difficult.

President Biden's 2022 proposal revised a ,500 electric vehicle tax credit. The new rule prevents one from using credits to purchase EVs with battery parts from a "foreign entity of concern. Such foreign entities include China. Based on The Wall Street Journal's article,since Congress passed tax-credit modifications, automakers have been scurrying to retool their EV supply chains.

The Biden administration officials believe they have had some success in getting the U.S. car sector to reduce its reliance on China. Furthermore, they acknowledge that China-related subsidy curbs, which the administration proposed this month, will take effect before many automakers locate other sources. Thus, consumers may have trouble claiming the tax credit in the future.

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