Volkswagen becomes the first foreign automaker to benefit from an electric vehicle credit

Volkswagen officials had said Monday that they expected the ID.4 to be eligible for the full $7,500 federal tax credit, but the company was still awaiting proper documentation from its battery supplier to submit to the Treasury Department.

The Treasury confirmed eligibility on Wednesday, and the ID.4 was officially added to the list of eligible vehicles on the government’s fueleconomy.gov site.

The ID.4 is built at a factory in Chattanooga, Tennessee. Production began in October – two months after President Joe Biden’s climate law, the Inflation Reduction Actadded new domestic sourcing requirements to the electric vehicle tax credit.

All of the other 14 available electric vehicle models eligible for the tax credit are from Tesla or one of the Detroit Big Three – Ford, GM or Stellantis. Some of these US-made EVs qualify for the full $7,500 credit, while others qualify for the $3,750 half credit.

The IRA’s changes to the tax credit have irked US allies, particularly in Europe, where government officials have objected to having their car brands excluded from the tax incentive.

The initial Treasury list also omitted vehicles from US-based Rivian, which exclusively manufactures electric pickup trucks and SUVs. This company announced on Wednesday that its 2023 R1T and R1S models meet the criteria for the Critical Minerals Sourcing Tax Credit – but most vehicle configurations do not meet the government’s requirement that SUVs , pickup trucks or vans cost $80,000 or less. (The limit is $55,000 for cars.)

Rivian said the tax credit may still be available, pending inclusion on the Treasury website, for buyers who previously locked in prices below $80,000 but have yet to take delivery. But those shoppers would still have to meet the law’s income threshold, which excludes shoppers with adjusted gross incomes over $150,000 to $300,000.

POLITICO

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