Big news out of the federal government could be a big boon for certain automakers.
The Treasury Department said yesterday it would delay releasing proposed guidance regarding the sourcing of EV batteries that are part of the Inflation Reduction Act’s (IRA) new $7,500 EV tax credit.
The IRA’s rules regarding the EV tax credit require that $3,750 of the credit is only eligible if 40% of the value of the critical minerals in the battery have been “extracted or processed” in the U.S., or a country with a U.S. free-trade agreement. The Treasury has delayed guidance for this requirement until March, instead of January 1, 2023.
The other $3,750 portion of the credit is contingent on having 50% of the battery components built in North America. The IRA EV tax credit also requires that EVs are assembled in North America, along with pricing ($55,000 for cars and $80,000 for trucks, SUVs) and income requirements to meet in order to receive the credits.
The delay in the critical minerals guidance is a big deal for manufacturers like GM (GM) and Tesla (TSLA), because they are going to be reinstated into the EV tax credit regime on January 1st. Under the prior rules of the EV tax credit, GM and Tesla were phased out of any credits because they had reached the overall sales threshold of 200,000 EVs sold for those credits.
In addition, GM and Tesla were likely only going to receive half the tax credit due to the battery critical minerals requirement. The delay until at least March means for most of Q1 and possibly beyond, some of their EV offerings will be eligible for the full EV tax credit of $7,500, assuming the buyer has met the income requirements.
GM and Tesla Vehicles that are eligible for the full tax credit include:
Chevrolet Bolt EV and EUV
Cadillac LYRIQ
Tesla Model 3 (rear wheel drive)
Tesla Model Y (long range & performance trims)
Note that Ford, which is also eligible for the tax credit but was never phased out, is also eligible for the full tax credit too for certain vehicles. Here are some notable non-GM or Tesla models that are eligible for the full credit starting January 1:
Ford Mustang Mach-E
Ford F-150 Lightning
Ford E-Transit Van
Jeep Wrangler 4xe
Jeep Grand Cherokee 4xe
Nissan Leaf
Rivian R1T (dual motor)
Volkswagen ID.4
"Tax credit extensions will certainly get more consumers thinking about an EV purchase and drive pull-ahead purchases," said Ivan Drury, Edmunds' director of insights in a statement to Yahoo Finance. "The timing isn't optimal as EV inventories are still low with many already spoken for, and borrowing costs are at all-time highs, but for those that were already planning a purchase or had a vehicle on-order, this could be a nice, unexpected bonus."
Another big factor that is awaiting more guidance is the exemption for commercial clean vehicles, which would allow the full EV tax credit for leasing vehicles, regardless of country of assembly. Senator Joe Manchin (D-WV), who was instrumental in creating the IRA’s tax credit incentives, says Treasury should limit the use of the commercial EV tax credit for leasing.
"Some automakers and foreign governments are asking your agency for a broad interpretation of 45W that would allow rental cars, leased vehicles, and rideshare vehicles (such as those used for Uber and Lyft), a huge piece of the U.S. vehicle market, to be eligible for the full $7,500 commercial vehicle credit as a way to bypass the strict sourcing requirements," Manchin wrote in a letter to Treasury, noting his concerns.
—
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
Click here for the latest trending stock tickers of the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
The Treasury Department will delay guidance on the sourcing of EV batteries, part of the new $7,500 EV tax credit. That's good news for Tesla and GM.
The Treasury Department announced a timeline for providing additional information on key tax provisions of the Inflation Reduction Act (IRA), in an effort to provide "clarity to consumers and…
Nike is fixing one its biggest issues of the last six months.
(Bloomberg) — Chicago is in the cross-hairs of a powerful winter storm that could become a “bomb cyclone” — with deep snow, searing winds and an Arctic chill — threatening to disrupt Christmas travel for millions of people in the US and bring a deep freeze to the eastern two-thirds of the country. Most Read from BloombergI’ve Seen Trump’s Tax Returns and Now You Can, TooDonald Trump’s Taxes Reveal Big Losses: What We Learned So Far, in ChartsMusk Lashes Out at Unhappy Investor as Tesla Shares R
(Bloomberg) — Some restrictions on the electric-vehicle tax credit that were slated to take effect Jan. 1 will be delayed until March after the US Treasury Department postponed issuing related guidance on how to meet the new requirements.Most Read from BloombergI’ve Seen Trump’s Tax Returns and Now You Can, TooMusk Will Resign as Twitter CEO and Focus on EngineeringMusk Lashes Out at Unhappy Investor as Tesla Shares RetreatMessi Evacuated by Helicopter After Crowds Swarm World Cup WinnersPrivat
People who want to buy an electric vehicle could get a bigger-than-expected tax credit come Jan. 1 because of a delay by the Treasury Department in drawing up rules for the tax breaks. The department said late Monday it won't finish the rules that govern where battery minerals and parts have to be sourced until sometime in March. As a result, it appears that buyers of EVs assembled in North America with batteries made in the U.S., Canada or Mexico will be eligible for a full $7,500 tax credit under the Inflation Reduction Act.
Yahoo Finance Live anchors discuss why Tesla stock continues to underperform.
(Bloomberg) — Chinese lenders have leaped ahead of their Wall Street peers in global rankings for initial public offerings, as China wraps up a record year for listings which bucked one of the worst slowdowns in deals history.Most Read from BloombergMusk Will Resign as Twitter CEO and Focus on EngineeringI’ve Seen Trump’s Tax Returns and Now You Can, TooMusk Lashes Out at Unhappy Investor as Tesla Shares RetreatMessi Evacuated by Helicopter After Crowds Swarm World Cup WinnersAmazon Ring Camera
The concerns mount on Tesla.
These snowbirds are heading south for the winter. And staying put.
2022 is almost over and although 2023 brings with it plenty of uncertainty, most investors will no doubt be happy that a tumultuous year for the stock market is finally coming to an end. The selling pressure has at times been so severe that it didn't really matter whether a stock has strong fundamentals or not, the reflex has been to throw the baby out with the bathwater. The upshot to the relentless selling is that now investors get a chance to load up on their favorite names at a big discount.
(Bloomberg) — King Dollar is facing a revolt. Most Read from BloombergI’ve Seen Trump’s Tax Returns and Now You Can, TooDonald Trump’s Taxes Reveal Big Losses: What We Learned So Far, in ChartsMusk Lashes Out at Unhappy Investor as Tesla Shares RetreatMusk Will Resign as Twitter CEO and Focus on EngineeringChina's Covid Tsunami Could Spark a Dangerous New Variant That Infects the WorldTired of a too-strong and newly weaponized greenback, some of the world’s biggest economies are exploring ways
Despite all the pain from Elon Musk's Twitter distractions, Tesla ranks fourth on a list of the worst S&P 500 stocks of 2022 by market-value decline.
Wood's flagship Ark Innovation ETF has dropped 66% year to date, and is down 80% from its February 2021 peak.
There’s been no hiding place for most investors seeking shelter from 2022’s stormy market conditions. Most corners of the market have been subjected to a torrid time, pushed under by a combination of soaring inflation, the aggressive interest rate hikes taken in order to tame it, and a global macro environment rocked by Russia’s invasion of Ukraine and China’s zero-Covid policies. The fear now is that a recession in 2023 is all but inevitable – either of the mild variety or a lengthy and painful
The voices issuing warnings of an impending recession have been growing louder. The feeling on Wall Street is that one is all but inevitable right now. One prominent name to wade in on the matter is billionaire David Rubenstein. The Carlyle Group co-founder believes that due to the current economic environment of "jacked up" interest rates, gross domestic product growth is set to decelerate, bringing in to play a recession. Not only that, but he also thinks the Fed is unlikely to put the brakes
Shares of cybersecurity software stocks CrowdStrike (NASDAQ: CRWD), Palo Alto Networks (NASDAQ: PANW), and Fortinet (NASDAQ: FTNT) were falling today, down 2.1%, 1.1%, and 1.3% as of 1:49 p.m. ET, even though the broader Nasdaq Composite was up by about 1.5% at that time. Yesterday, Palo Alto announced the closing of its acquisition of Cider Security, a leader in software application protection. On Tuesday night, cybersecurity peer BlackBerry had its fiscal third-quarter earnings report, in which management noted some caution in closing large cybersecurity deals in the near term, as sales cycles have become "elongated," which is a fancy term for customers being slower to sign off on purchases.
(Bloomberg) — Elon Musk pushed back on criticism from one of Tesla Inc.’s most vocal supporters amid growing concern about the chief executive officer’s ability to manage Twitter Inc. and his other businesses.Most Read from BloombergMusk Will Resign as Twitter CEO and Focus on EngineeringMusk Lashes Out at Unhappy Investor as Tesla Shares RetreatMessi Evacuated by Helicopter After Crowds Swarm World Cup WinnersAmazon Ring Cameras Used in Nationwide ‘Swatting’ Spree, US SaysTrump’s Tax Records t
The Fed will keep fighting inflation, and the unemployment rate will rise. But there are positive trends on the horizon.
Tech stocks largely were down in 2022. And while no big name company did terribly well on the market, some performed far better than others.
