If the battery assembly percentage required for the clean vehicle tax credit is not met, the vehicle does not qualify for the full tax credit. According to the Inflation Reduction Act, vehicles must meet specific battery component requirements, where a certain percentage of the battery’s value must be manufactured or assembled in North America to be eligible for a portion of the credit.
- For 2023, 50% of the battery components’ value must be manufactured or assembled in North America to qualify for a $3,750 credit.
- For 2024 and 2025, the percentage increases to 60%.
- This requirement continues to rise annually until reaching 100% in 2029.
If a vehicle fails to meet these percentages, it may still qualify for another portion of the tax credit, depending on whether other requirements are met. Specifically, there is also a critical minerals requirement that can provide an additional $3,750 credit if fulfilled. However, not meeting the battery assembly percentage would directly impact eligibility for the portion of the credit tied to that specific requirement.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-happens-if-the-battery-assembly-percentage-is-not-met/
