US EV buyers will lose tax credit under legislation

WASHINGTON: Audi of America, Kia Corp and Porsche said on Friday that buyers of its electric vehicles will lose access to federal tax credits of up to $7,500 once President Joe Biden signs a $430 billion climate, health and tax measure.

The Volkswagen AG unit said only the Audi plug-in hybrid electric will retain its existing federal credit through the rest of the year. Audi said the legislation set to be approved by the US House of Representatives on Friday “will have consequential impact on our business and to our consumers.”

The bill makes any electric vehicles assembled outside North America ineligible for tax credits, which has brought criticism from the European Union, South Korea and many automakers. The bill does allow credits for customers with binding contracts for vehicles not yet delivered when Biden signs the legislation.

Kia said in a leter to its US dealers that the bill means all of its EV and plug-in vehicles will no longer qualify for tax credits once the bill is signed unless customers have writen binding contracts.

Kia urged dealers to reach out to customers on waiting lists to enter into contracts before Biden signs the bill. The letter, which the company confirmed on Friday, called the “sudden change” in EV tax policy “very disruptive to our business and unfortunately for our customers.” Vw-owned Porsche said on Friday that buyers of its electric Taycan and plug-in hybrid Cayenne and Panamera vehicles will also immediately lose eligibility once the legislation is signed.