Skip to main content

This could be good news for anyone who wants to use the federal EV tax credit

The U.S. and European Union are holding talks to make more EVs eligible for the EV tax credit

Anyone that’s attempting to keep up with all of the changes with the federal tax credit for electric vehicles is sure to have gray hairs at this point. So much has changed that it takes a degree to keep up with. The United States and the European Union are currently holding negotiations to, hopefully, expand the number of vehicles that are eligible for the federal tax credit and make things a little easier for shoppers.

According to The White House, the U.S. and the European Union are holding discussions that focus on the components that go into a battery pack. The goal is to come to an agreement to include critical minerals that are extracted or processed in the European Union to count toward the current requirements for electric vehicles to be eligible for the federal tax credit under the current Inflation Reduction Act.

2023 Hyundai Ioniq 6 rear end close up driving down the road with windmills in the back.
Hyundai

“To that end, we intend to immediately begin negotiations on a targeted critical minerals agreement for the purpose of enabling relevant critical minerals extracted or processed in the European Union to count toward requirements for clean vehicles in the Section 30D clean vehicle tax credit of the Inflation Reduction Act,” stated The White House in a press release.

Recommended Videos

If negotiations go well, this could be greatly beneficial for consumers looking to purchase an electric vehicle, because it would expand the number of cars that are eligible for the $7,500 federal tax credit. That would lead to more people making the switch to an EV.

Under previous guidance that the government put out, EVs have to meet some requirements to be eligible for the tax credit: the EV has to have a final assembly point in North America, an EV has to have a minimum percentage of critical minerals that have to be extracted or processed in the U.S. or have minerals that come from one of America’s free trade partners or be recycled in North America, and an EV has to have a minimum percentage of battery components that are assembled or manufactured in North America.

A lot of automakers have voiced criticism against the current requirements in the Inflation Reduction Act. Brands like Hyundai and Kia got screwed over with the requirements, so hearing that the U.S. government is flexible and open to making changes could be a good sign for other countries and automakers.

While this is good news for shoppers, the U.S. government is supposed to have all of its guidelines on the federal tax credit in place this month. So, things could change for buyers very shortly.

Joel Patel
Former Digital Trends Contributor
Joel Patel is a former contributor for The Manual. His work has also been featured on Autoweek, Digital Trends, Autoblog…
Rivian reveals second-generation EVs with 1,025-hp quad-motor
New Rivian EVs have up to 1,025 horsepower
Red second-generation Rivian R1T right rear three-quarter view parked on beach edge facing water bike on back of the truck.

Second-generation Rivian R1T Rivian / Rivian

Rivian recently presented second-generation models of its original R1T EV pickup truck and R1S EV SUV. The EVs have significant performance upgrades, new drive systems, a new user interface and experience software platform, and many other improvements, according to Rivian, which describes the new generation as completely reengineered.

Read more
Kia EV3 reveal: Designed for first-EV buyers seeking efficiency, accessibility
Kia EV3 global reveal: What to look for
Kia EV3 Concept right front three-quarter view.

We know much more than before about the Kia EV3 and look forward to learning much more before the production lines start rolling. The EV3 is important in Kia's plan for a complete EV1 to EV9 model lineup by 2027. According to Kia President and CEO Ho Sung Song and other Kia Global leaders, the EV3 is exactly what many EV customers want in a fully-equipped, compact electric SUV with a bold design, robust build, and innovative technology.

Kia Global executives introduced the Kia EV3 to journalists ahead of the worldwide reveal of the compact electric SUV's May 23 worldwide reveal. Most of the EV3's precise specifications aren't available before the all-electric vehicle goes into production. The Kia execs shared pricing, range estimates, and information about EV3's design and target market. Kia will begin EV3 deliveries in Korea in July 2024. U.S. deliveries will begin in 2025.
Why the Kia EV3 is a big deal

Read more
New survey suggests automakers aren’t building the EVs people really want
What kind of EVs do people really want to buy?
Electric car plugged into charger

Despite the Bitcoin-esq wave of obsession that so many people have jumped on board with when it comes to EVs, it suddenly feels like sooner or later, you're going to hear some version of this around the watercooler, "A funny thing happened on the way to the Tesla dealership... We turned around."

In a new 2024 Edmuds EV Sentiment Study, it seems that the supply of electric vehicles is not quite on par with the demand, but not in the way you might have learned in economics class. There is a litany of EVs to choose from, but the problem is that many potential customers don't want them. Here's why:
EV shoppers want a cheaper car
 

Read more