Bill in Congress would delay the new restrictions on what cars qualify for EV tax credits

Sen. Joe Manchin, D-W.Va., attends a celebration for the passage of the Inflation Reduction Act. Manchin shaped provisions in the act that greatly limit the eligibility of EV tax credits. (Reuters)

A number of automakers have publicly questioned provisions in the Inflation Reduction Act regarding the sourcing of raw materials. We recently covered the stipulations causing controversy after GM CEO Mary Barra said GM would need about two to three years to meet the requirements so that consumers could get the full $7,500 federal tax credit. The most debated elements of the IRA in this regard are: 

• Vehicles will need to be built with minerals that are extracted or processed in a country the U.S. has a free trade agreement with. The minimum amount starts at 40% in 2023, climbing 10% every year.

• Vehicles must have a battery that includes a large percentage of components that were manufactured or assembled in North America. Next year, this means at least 50% of component value, rising 10% every year.

• The deal caps the suggested retail price of eligible vehicles at $55,000 for new cars and $80,000 for pickups and SUVs.