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VW, Rivian, Nissan, BMW, Genesis, Audi and Volvo lose EV tax credits starting tomorrow

The U.S. Treasury said Monday that Volkswagen, BMW, Nissan, Rivian, Hyundai and Volvo electric vehicles will lose access to a $7,500 tax credit under new battery sourcing rules. The Treasury said the new requirements effective Tuesday will also cut by half credits for the Tesla Model 3 Standard Range Rear Wheel Drive to $3,750 but other Tesla models will retain the full $7,500 credit. Vehicles losing credits Tuesday are the BMW 330e, BMW X5 xDrive45e, Genesis Electrified GV70, Nissan Leaf , Rivian R1S and R1T, Volkswagen ID.4 as well as the plug-in hybrid electric Audi Q5 TFSI e Quattro and plug-in hybrid (PHEV) electric Volvo S60. The Swedish carmaker is 82%-owned by China’s Zhejiang Geely Holding Group. The rules are aimed at weaning the United States off dependence on China for EV battery supply chains and are part of President Joe Biden's effort to make 50% of U.S. new vehicle sales by 2030 EVs or PHEVs. Hyundai said in a statement it was committed to its long-range EV plans and that it "will utilize key provisions in the Inflation Reduction Act to accelerate the transition to electrification." Rivian declined to comment and the other automakers could not immediately be reached for comment. Treasury also disclosed General Motors electric Chevrolet Bolt and Bolt EUV will qualify for the full $7,500 tax credit. GM said earlier it expected at least some of its EVS would qualify for the $7,500 tax credit under the new rules, including the 2023 Cadillac Lyriq and forthcoming Chevrolet Equinox EV SUV and Blazer EV SUV. Treasury said all GM EVs will qualify. Earlier, Ford Motor and Chrysler-parent Stellantis said most of their electric and PHEV models would see tax credits halved to $3,750 on April 18. Treasury confirmed the automakers' calculations. The rules were announced last month and mandated by Congress in August as part of the $430 billion Inflation Reduction Act (IRA). The IRA requires 50% of the value of battery components be produced or assembled in North America to qualify for $3,750, and 40% of the value of critical minerals sourced from the United States or a free trade partner for a $3,750 credit. The law required vehicles to be assembled in North America to qualify for any tax credits, which in August eliminated nearly 70% of eligible models and on Jan. 1 new price caps and limits on buyers income took effect.

Audi spending an additional $2.5 billion on expansion through 2019

Every year, it seems the Volkswagen Group announces a new and larger spend to push growth and profit, with Audi a regular recipient of the moolah. That's reasonable, seeing as hauls in 40 percent of Group operating profits. In December last year Audi said it would spend an additional 100 million euros ($122M US) per year through 2018 to develop new models and expand production, targeting 60 models by 2020 and luxury sales leadership. This month Audi said it will boost that by another two billion euros ($2.5B US) over the next five years, for a total outlay of 24 billion euros from 2014 to 2019. Something like 70 percent of those billions will be spent on new models, technology like "connectivity and lightweight construction," and factory expansion at its plants in Ingolstadt and Neckarsulm. Most of the ten models that will plump the lineup to 60 cars will mainly be aimed at the C and D segments, as well as crossovers, the brand's burgeoning portfolio of PHEV models, and all-electric cars that will begin staking ground in the segment. The big spend comes at the same time as Audi is working hard to reduce costs by $2.5 billion to maintain profitability, part of a larger push by VW to cut costs by $6.1 billion by 2017. More than a billion euros will go to new factories in Mexico and Brazil. Work begins on the Mexico plant next year, and when it comes on-line in 2016, Audi's Q5 successor will roll out of its warehouse doors; Audi has already announced it will hire 850 more workers next year in Mexico. When that's done, Mexico's production of German luxury cars will only trail that of Germany, China and the US. The company's Brazil plant will produce the A3 and S3 starting next year, and the brand figures luxury car buying there will triple by 2017. News Source: Reuters Earnings/Financials Plants/Manufacturing Audi Volkswagen Luxury Mexico Brazil ulrich hackenberg

VW will need to recall 323,700 diesel vehicles in India

Volkswagen Group's diesel emissions scandal continues to spread, and now the automaker must recall 323,700 diesel vehicles in India because of too much pollution, according to Bloomberg. The campaign covers models from several of the group's brands including VW, Audi, and Skoda. The Automotive Research Association of India first discovered the emissions irregularities after conducting its own real world and lab tests, and the Indian government then commanded VW to explain what was happening. The country's regulators will allow the automaker to set the recall schedule for the repairs, according to a government official who spoke to Bloomberg, and the campaign will likely happen in phases. Among the affected vehicles, there will be about 100,000 from the VW brand including the Jetta, Passat, and some variants of the Polo. VW already has repairs for some of the affected diesel engines in Europe, and the company can allegedly fix the emissions problem with new software and small hardware changes. The situation is harder in the US where regulators still need to approve any proposed solutions, and VW also must now recall its 3.0-liter V6 TDI in California to eliminate other problematic code. The German automaker faces investigations from regulators all over the world into its emissions evasions, and they could be quite costly. One estimate already suggests the minimum price of the potential repairs, fines, and other expenses at about $24.5 billion. Officials in Brazil have already fined the company $13 million for pollution issues with the diesel Amarok pickup and requested a recall to fix them.