BMW AG (ETR:BMW), Nissan and Rivian Automotive Inc (NASDAQ:RIVN) are among electric vehicle (EV) manufacturers which will no longer be eligible for US tax credits from Tuesday as new rules come in aimed at boosting domestic production.
Under the new rules, 50% of the value of battery components will need to be produced in the US and 40% of the critical minerals must be sourced domestically or from a free trade partner for companies to qualify for credits.
People buying EVs had been able to access US$7,500 worth of tax credits per vehicle since the Biden administration introduced the near-US$400bn Inflation Reduction Act in August.
Tuesday’s new rules will cut the number of models qualifying for the full amount of credits though, including Tesla Inc (NASDAQ:TSLA)’s Model 3, alongside vehicles from Ford Motor Company (NYSE:F) and Stellantis NV (NYSE:STLA, EPA:STLA).
Models from BMW, Nissan, Rivian, Hyundai, Volvo and Volkswagen will be completely wiped from the scheme meanwhile, unless each ramps up domestic US production.
Ford, with EVs that still qualify for US$3,750 in credits, has mulled moving more of its operations across the Atlantic in light of the healthy incentives offered by the Inflation Reduction Act.
BMW, Hyundai and Tesla have also made plans to bolster US-based production since the legislation was passed last year, which is estimated to have attracted US$200bn of investment so far.