Biden admin quietly adds fix, making expensive sports cars eligible for EV tax credits – Fox Business

Bill Ford, executive chairman of the Ford Motor Company

The Biden administration issued guidelines on Thursday with explanations which electric vehicles (EV) are eligible for tax credits and included a temporary solution making a wide range of cars eligible.

The Ministry of Finance reports this in a statement under the Inflation Reduction Act (IRA), which President Biden signed into law in August, mainstream consumer EVs would be eligible for the $7,500 commercial clean vehicle credit if leased instead of purchased. The temporary solution allows dealers or companies that lease cars to collect the credit on leased EVs that, if purchased, would not be sold qualify for the tax benefit.

“By issuing today’s guidance, the Treasury Department is simply following tax laws and the IRA as written,” a Treasury Department spokesman told FOX Business Thursday night. “The tax laws governing ownership in a leasing situation and what constitutes a legitimate business use – and therefore what would fall under the 45W credit for commercial vehicles purchased for use or lease – are longstanding, settled and clear.”

According to the Treasury Department, a “qualified commercially clean vehicle” is one made by a qualified manufacturer, purchased for use or lease by a taxpayer, and “powered in a substantial portion” by an electric motor powered by a battery. Any lease EV that falls meets the broad requirements and is less than £14,000 qualifies for the $7,500 credit.

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President Biden listens as Ford Motor Company executive chairman Bill Ford speaks at the Detroit Auto Show on Sept. 14. (AP Photo/Evan Vucci/AP Newsroom)

Interpreting the definition of commercial vehicles allows consumers to understand the much stricter requirements implemented by the IRA that EVs must meet to qualify for the credit if purchased. To qualify under the new law, purchased EVs must have undergone final assembly in North America; costs less than $55,000 or $80,000 for vans, sport utility vehicles (SUVs), and pickups; and are purchased by an individual with an annual income of less than $150,000 or a family with an annual income of $300,000.

In addition, the Biden administration said it would begin enforcing a fourth qualification for purchased electric vehicles in March. The qualification states that at least 40% of the critical minerals in the battery of a purchased electric car must have been mined or processed in the US or a country that has a free trade agreement with the US.

Senator Joe Manchin, DW.Va., who was instrumental in crafting the IRA’s EV tax credit requirements and pushing the bill, denounced the announcement of the Ministry of Finance on Thursday, arguing it would allow companies to exploit loopholes. He added that he would write new legislation during the upcoming Congress to clarify the intent of the law.

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“The information released today by the Treasury Department outlining how they will implement the tax credits for commercial and consumer EVs is in line with the wishes of the companies seeking loopholes and is clearly not consistent with the intent of the law,” Manchin said in a statement after the directive was issued Thursday. “It only serves to weaken our ability to become a more energy secure country.”

Manchin also criticized the administration for delaying implementation of the critical mineral supply until March, saying he “cannot fathom why the Biden administration would issue guidelines that would ensure we continue on this path.” January 1, 2023. Hostile nations like China and Russia dominate the world critical mineral supply chains which are essential for the production of electric vehicles.

Biden signs Inflation Reduction Act

President Biden signs the Inflation Reduction Act as Senator Joe Manchin, DW.Va., departed and others watch at the White House Aug. 16. (Demetrius Freeman/The Washington Post via Getty Images/Getty Images)

While eligibility for many EVs when purchased expires in 2023 according to the IRA, Thursday’s guideline means tax credits could eventually still be collected on high-priced sports cars when they’re leased. The federal government has previously issued a long list of EVs, including cars from high-end brands such as Bentley, Ferrari, McLaren, Mercedes-Benz and Porsche, which are eligible for the credit if purchased in 2022 or earlier.

For example, the Bentley Bentayga Hybrid SUV — whose starting price is about $167,000 according to Car and Driver — qualifies for a $7,500 clean utility vehicle credit if leased under the direction of the Treasury Department.

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In addition, the Ferrari 296 GTB costing nearly $323,000, the McLaren Artura costing about $237,000, the Mercedes-Benz costing $105,000, and the Porsche Taycan costing $84,000 would all qualify for a credit in the same way.

“These are lawn ornaments for most people. It’s to show that you’re a good person because you have an electric Mercedes,” Dan Kish, a senior fellow at the free-market think tank Institute for Energy Research, told FOX Business. “That kind of virtue signaling — when people are just struggling to make ends meet — is exactly the kind of elitist mentality that seems to surround much of the whole green agenda.”

“Even if you put boundaries around it, as we’ve been told, it turns out that the Treasury just writes its own rules,” he added.

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