Key takeaways:
- The original ‘Buy American’ bill closed out Canadian automakers; the new account must still pass Congress.
- Canadian automakers were eased to listen that a U.S. bill that would have seen customer tax credits for EVs restricted to U.S.-made cars could be extended to North America after Democrats in the U.S. Senate reached a contract.
Canadian automakers lived a sigh of comfort Thursday after U.S. lawmakers scrapped part of a vast incentive package for electric cars that would have excluded those made in Canada from an offered customer tax credit.
The $7,500 US credit for “clean cars” — battery-electric, plug-in hybrid, and hydrogen fuel cells — is part of $369 billion in offered new spending on energy- and climate-related initiatives contained in the Inflation Reduction Act.
U.S. senators Chuck Schumer and Joe Manchin, both Democrats, reached a contract late Wednesday to have the credit and a series of other taxation and investment criteria sought to expand the clean energy sector and spur the adoption of EVs in the bill, which expects to restore an economy struggling to dig out from under 9.1 percent inflation.
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The deal was a shock, coming less than two weeks after Manchin, a centrist Democrat whose vote is required to get the bill through the evenly split Senate, had said he would not keep an extensive environment bill President Joe Biden was expecting to pass till inflation was under control.
The Senate is anticipated to vote on the bill next week before it moves to the Democratic-controlled House of Representatives.
Canada lobbied hard to be comprised
Flavio Volpe, CEO of Canada’s Automotive Parts Manufacturers’ Association, told the extent of the offered amendment could not be stretched and, coupled with the hundreds of millions of dollars the Canadian government is funneling into EV and battery manufacturing, should provide the EV sector the boost it requires.
Source – CBC News
