By David Shepardson and Nathan Gomes
NEW YORK (Reuters) -Ford Motor Co and Chrysler-parent Stellantis said on Wednesday that most of its electric and plug-in electric hybrid models will see tax credits halved to $3,750 on April 18 after new U.S. Treasury rules take effect.
The rules, which were unveiled Friday, were mandated by Congress in August as part of a $430 billion climate bill. China dominates the global supply chains of products like EV batteries and solar panels and the rules are aimed at moving U.S. battery production and supply chains away from China.
Out of six Ford vehicles, just the F-150 Lightning pickup truck and Lincoln Aviator Grand Touring will still be eligible for a $7,500 credit. The other models currently getting credits - Ford Mustang Mach-E, Ford E-Transit, Ford Escape Plug-In Hybrid and Lincoln Corsair Grand Touring - will see credits drop to $3,750.
Stellantis said of its three plug-in hybrid electric models, its Chrysler Pacifica plug-in electric hybrid will qualify for $7,500 tax credits after April 18, while the Jeep Grand Cherokee 4xe and Jeep Wrangler 4xe qualify for just $3,750.
"We will make sure our products are able to use those subsidies," Stellantis CEO Carlos Tavares told reporters on the sidelines of the New York Auto Show adding the credits are a "major driver for the industry because it impacts the affordability."
The stricter EV battery sourcing U.S. Treasury guidance issued on Friday triggers new requirements for critical minerals and battery components.
Ford said in March it expects its electric-vehicle business unit to lose $3 billion this year, but will remain on track for a pretax margin of 8% by late 2026.
Sales of Ford's electric vehicles jumped 41% in the first quarter, data on Tuesday showed.
General Motors (NYSE:GM) said last week it expects some electric vehicles (EVs) will qualify for the $7,500 tax credit after the new guidance takes effect including the Cadillac Lyriq and the forthcoming Chevrolet Equinox EV SUV and Blazer EV SUV.
GM currently receives that amount for the Chevrolet Bolt and the forthcoming Chevrolet Silverado EV would have been eligible. GM said it expects Bolt vehicles to still qualify for some level of credit.
Tesla (NASDAQ:TSLA) said last week the Model 3 rear-wheel drive credit will be reduced as a result of the guidance.
All U.S. EV consumer tax credits require vehicles to be assembled in North America and have income and retail price caps.
Electric vehicles leased by consumers can qualify for up to $7,500 in commercial clean vehicle tax credits without any of the same restrictions. Those credits go to the company that owns the vehicle rather than the consumer leasing it.