Your #1 source for auto industry news and content

EV tax incentive delays could work in auto industry’s favor

The U.S. Treasury Department announced it would delay key pieces of its 2023 electric vehicle tax incentive guidelines until March.

The U.S. Treasury Department announced it would delay key pieces of its 2023 electric vehicle tax incentive guidelines until March.

Originally, the agency aimed to have all relevant regulations published in January. However, while the majority of the provisions are still on track to apply starting in the new year, rules governing EV battery sourcing will be delayed for at least another two months.

Carbon-neutrality was an important goal of the Biden administration’s Inflation Reduction Act, which is why the bill promised unprecedented EV tax incentives for drivers and car manufacturers. The market for battery-powered cars remains small, but is expected to grow steadily in the coming years, eventually replacing gas-powered cars entirely. However, the bill stipulated that vehicles would only qualify for EV tax incentives if they were built entirely on American soil.

J.D. Power, tax incentive

More: J.D. Power believes the EV market will outperform 2023 predictions

The delayed battery sourcing guidelines will dictate, among other things, which batteries qualify as American made, or if any exceptions to the rule exist. Since the rest of the rules will start applying in January, consumers will have a brief opportunity to earn EV tax incentives on vehicles containing non-American-made components.

The auto-industry is worried that threats of a recession, high vehicle prices and infrastructure limitations will suppress consumer interest in the early half of 2023. However, buyers, who have avoided expensive purchases for the last two years, may take advantage of the Treasury’s delay, and buy an EV using a non-domestic battery, provided the rest of the vehicle meets the other tax incentive requirements. This could possibly assist dealers worried about slow business in the next quarter.

Did you enjoy this article? Please share your thoughts, comments, or questions regarding this topic by connecting with us at

Be sure to follow us on Facebook, LinkedIn, and TikTok to stay up to date.

While you’re here, don’t forget to subscribe to our email newsletter for all the latest auto industry news from CBT News.

Colin Velez
Colin Velez
Colin Velez is a staff writer/reporter for CBT News. After obtaining his bachelor’s in Communication from Kennesaw State University in 2018, he kicked off his writing career by developing marketing and public relations material for various industries, including travel and fashion. Throughout the next four years, he developed a love for working with journalists and other content creators, and his passion eventually led him to his current position. Today, Colin writes news content and coordinates stories with auto-industry insiders and entrepreneurs throughout the U.S.

Related Articles

Manufacturers In This Article

More Manufacturer News

Latest Articles

From our Publishing Partners