- The US Treasury issued rules in December for new battery sourcing requirements to reduce dependence on the Chinese EV supply chain.
- General Motors and Ford noted that most of their EVs would lose eligibility with few exceptions.
- Ford announced plans to enhance the prices of its cheapest F-150 EVs and also decrease costs for some premium models.
- GM assured to offer an equivalent EV tax credit purchase amount for vehicles becoming ineligible due to the new guidelines.
New Regulations for EV Battery Sourcing
In December, the Treasury outlaid fresh directives regarding battery sourcing requirements. This initiative aims at minimizing the reliance of the U.S. EV supply chain on China. The regulations came into effect at the beginning of the week.
Effects on General Motors and Ford
General Motors confirmed previously in the month that all but its Chevrolet Bolt would temporarily forfeit their eligibility to benefits due to the change in the regulations. Models like the Cadillac Lyriq and Chevy Blazer EVs lost their credits because of the inclusion of two minor components from non-approved sources. In contrast, Ford said its E-Transit and Mach-E would not benefit from the $3,750 tax credit, while models like the F-150 EV Lightning pickup truck and the Lincoln Corsair Grand Touring SUV retained their credits.
Price Changes and Production
On Wednesday, Ford conveyed its decision to hike the cost of its lowest-tier F-150 EVs by $5,000 to $10,000. Moreover, the company plans to reduce the prices of selected premium models by up to $7,000. In context to production, in October, Ford announced a temporary reduction in shifts at the plant that manufactures the F-150 Lightning EV, resulting in expected lower production numbers.
General Motors informed its dealers it would continue to provide the equivalent EV tax credit purchase amount for any vehicles that became ineligible due to the new guidelines.
Vehicles Losing Tax Credit and Impact
The Treasury specified that vehicles such as the Volkswagen ID.4, Nissan Leaf, some Tesla Model 3s, and the Ford Mach-E would lose the tax credit. Consequently, the number of EV models qualifying for U.S. EV tax credits was reduced from 43 to 19. These developments could impact forex or trading concerning these automakers and their related assets, potentially creating volatility in their stock performance.