As soon as President Joe Biden signs a $430 billion climate, health, and tax measure, buyers of electric vehicles will no longer be eligible for federal tax credits of up to $7,500, according to statements made on Friday by Audi of America, Kia Corp., and Porsche.
Only the Audi plug-in hybrid electric will continue to be eligible for the current federal credit for the remainder of the year, according to the Volkswagen AG unit. The legislation that the U.S. House of Representatives is expected to approve on Friday “will have consequential impact on our business and to our consumers,” according to Audi.
The bill bars tax credits for any electric vehicles built outside of North America, which has drawn criticism from the European Union, South Korea, and numerous automakers. Credits are permitted under the law for customers with legally binding contracts for vehicles that have not yet been delivered when Biden signs the bill.
After the bill is signed, Kia stated in a letter to its U.S. dealers that all of its EV and plug-in vehicles will no longer be eligible for tax credits unless customers have signed legally binding contracts.
Before Biden signs the bill, Kia urged dealers to contact customers on waiting lists and encourage them to sign contracts. The “sudden change” in EV tax policy was described in the letter as “very disruptive to our business and regrettably for our customers,” which the company confirmed on Friday.
Porsche, which is owned by VW, announced on Friday that once the legislation is signed, purchasers of its electric Taycan, plug-in hybrid Cayenne, and Panamera vehicles will also immediately lose eligibility.
According to a Porsche Cars North America spokesperson, “With regard to customers who placed vehicles on order and are still waiting for delivery, their credit eligibility depends on individual sales agreement, which is a matter between them and their independently owned and operated Porsche dealership.”
After Biden signs the bill, 70% of the 72 American electric, plug-in hybrid, and fuel-cell EVs that currently qualify will no longer be eligible, according to the Alliance for Automotive Innovation, a trade group that includes VW, General Motors Co, Toyota Motor Corp, and Ford Motor Co.
“None would qualify for the full credit when additional sourcing requirements go into effect on January 1 when the additional income and price caps and battery and critical mineral sourcing rules under the new bill take effect,” the group added.