Electric vehicle dealers in the US have been urged by their suppliers to make new orders before President Biden’s new climate bill is enacted or else risk losing up US$7,500 in federal tax credits.
Audi of America, Kia and Porsche have all said the tax measure will go once Biden’s US$430 billion climate, health and tax measure become law.
VW-owned Audi said the legislation "will have a consequential impact on our business and to our consumers."
Under the legislation, any electric vehicle assembled outside the US will lose the tax credits but does not cover vehicles ordered but not yet delivered.
Kia said in a letter that all of its EV and plug-in vehicles will no longer qualify for tax credits unless a binding contract is already in place.
It described the change as "very disruptive to our business and unfortunately for our customers."
The Alliance for Automotive Innovation added the new climate change law would make 70% of electric, plug-in hybrid and fuel-cell EVs that currently qualify as ineligible.
"None would qualify” for the full credit from January 1 when price caps and battery and critical mineral sourcing rules kick in, the AAI added.
Not all were unhappy with Biden’s plans, however.
Shares in sustainable fuels technology company, Velocys, shot up 13% as it welcomed the proposed legislation.
Sustainable Aviation Fuel (SAF) tax credits are an integral part of the Act, with SAF the only current commercially scalable decarbonisation route for the aviation sector.
As announced in November 2021, Velocys has already secured long-term offtake arrangements for 100% of the SAF output expected from its Bayou Fuels facility.
This critical legislative development in the US follows last month's launch by the UK Government's Department for Transport of its Jet Zero Strategy, setting out the Government's approach for achieving net zero aviation by 2050.
This includes an ambition for a minimum of five commercial-scale SAF plants to be under construction in the UK by 2025 and a mandate for the equivalent of at least 10% SAF to be blended into conventional aviation fuel by 2030.
Henrik Wareborn, CEO, said: "This development, coupled with the UK's launch of its Jet Zero strategy, represents a major endorsement of Sustainable Aviation Fuel, and Velocys' proprietary technology to produce it."
Velocys shares rose 0.5p to 5.7p.