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EV tax credits could reshape supply chains

Photo of an electric car being assembled by robots at a factory.

image: David Hecker / AFP (beautiful pictures)

The latest tax break for electric vehicles could change where our cars, electric pickups, are assembled manufacturers are fighting to be first on the road, and flights were delayed at their pre-pandemic peak. All that and more in Morning shift for August 15, 2022.

First gear: Tax credits can reshape supply chains

Last week, legislators in the US passed a bill that would bring in a series of new tax credits for electric car buyers. However, upgrade manuals to a shiny new EV are not without caveats, and those caveats can affect the way automakers build their cars.

New tax breaks for electric vehicles removed limited sales on such products, bringing the sum of $7,500 to many manufacturers. But in exchange for this, the government requires that any electric vehicle that deserves credit must be made in the US. And now, Automotive news report that this need could affect the way we build cars. By page:

The old $7,500 tax credit – with no limits on price, income or battery life – will remain in effect until the end of 2022. However, industry experts say it will be rolled out immediately. modified to apply only to vehicles assembled in North America.

Manufacturers of electric vehicles – battery-electric, plug-in hybrid and fuel-cell vehicles – must now decide whether they will evict all, some, or not impose the new tax. Depending on their strategy, that could mean having to reshape their supply chains sooner than expected to rely more heavily on credit-friendly countries and potentially looking for new opportunities. alternative battery chemistries to rely less on credit-excluded countries.

Currently, about 70% of electric vehicles currently eligible for the tax credit will ineligible when the new law comes into effect. Analysts predict that it could take several years for manufacturers to move sourcing and production to the US to qualify for the incentives.

With the next round of credit due to expire in 2032, an analyst told Automotive News the “worst case scenario” could see automakers spend the next five years changing their supply chains. them and have only four or five years left to sell electric cars. comply with the new incentives.

2nd gear: Fisker Eyes US factory

And just like that, an EV startup has hinted that it could change some manufacture to the United States to qualify for these new tax breaks.

Reuters reports that electric vehicle startup Fisker is “exploring options for manufacturing in the United States by 2024.” If the company can do this, then their next model, the Ocean, will qualify for the next round of EV tax credits.

Currently, based in California Fisker will assemble its Ocean electric SUV at a factory in Austria. Production of this model is expected to begin in November. With the new tax credits expected to be signed into law as early as this Friday, Fisker Ocean buyers may be about to quit. missed the tax cut. According to Reuters:

Over the weekend, Fisker said it was reaching out to U.S. customers who had pre-ordered them to make sure they had a chance to qualify for a $7,500 federal tax credit for electric vehicles if the Inflation Reduction Act signed into law.

Furthermore, if you want to sneak in and buy a Fisker before the tax credit changes, you can’t. Fisker says it’s sold out Sport and Ultra variants of Ocean SUV was scheduled to come to the United States

3rd gear: Semi-electric trucks may be available soon

If that’s not enough tax credit news for Monday, here’s one last entry to start your week. The new bill also includes subsidies for electric vehicles, with “approximately $374 billion in climate and energy spending on cleaner commercial vehicles.”

It should come as no surprise, then, that two of the noisiest parties in the race to build a fleet of electric pickup trucks has increased again. Immediately after the Senate passed the Inflation Reduction Act, Elon Musk tweeted that the Tesla Semi came this year and Nikola announced that the auto veteran Michael Lohscheller will be promoted to CEOsignaled its desire for new success in space.

According to Bloomberg:

For passenger cars, trucks will have to meet strict requirements to enjoy incentives. Battery materials need to come from countries with which the US has a free trade agreement, not countries involved, such as China. While it remains unclear how many meet the criteria, there will certainly be large battery-powered rigs.

In March, shipping giant Maersk said it would buy 110 Class 8 electric rigs from Volvo Trucks. Nikola plans to deliver at least 300 trucks this year, and Daimler Truck also has electric models on the road.

Under the new tax breaks, each electric truck sold will be eligible for a $40,000 discount. But despite this huge incentive, Musk has previously said he thinks nothing of “Biden’s signature economic package.” I guess it’s his Sudden acceleration of the Semi . timeline So it’s all just a fun coincidence?

4th gear: Usain Bolt Left THEYis Electric Motorcycle All End

If it’s not the electric cars and trucks that cross our streets, it is convenient new ways of electric personal mobility. Things like electric bicycles, skateboards, and scooters have filled the streets of the city as commuters look for new ways to get around town. But despite their growing popularity, one electric vehicle company is still struggling in the US

Founded by Olympic gold medalist Usain Bolt, Bolt Mobility has flooded cities across the United States with electric scooters and dormant e-bikes. The company was forced to cut its scooter rental business in some US markets as capital dried up. According to Automotive News:

Bolt Mobility, in an August 3 statement on its website, said investors had failed to live up to their commitments to the company, forcing it to ‘significantly scale back operations’. It said franchisors will continue to operate in 25 markets but they must leave eight markets under the company’s control.

TechCrunch reports that the markets Bolt dropped include Portland, Ore; Burlington, South Burlington and Winooski, Vt.; Richmond, California.; and St. Augustine, Fla. Officials in several cities said the company disappeared without warning or explanation.

The company was founded by an eight-time Olympic gold medalist who is said to have left hundreds of bicycles and scooters in American cities. Bolt Mobility says it is working with local franchisees to collect abandoned bikes from markets that are no longer operating.

In a statement, Bolt Mobility said that 25 of its 33 markets are now run by independent owners. For the remaining eight markets, the company hopes that “an upcoming, agreed-upon investment” will keep services running.

5th gear: US flight delay BILLIONop Pre-Pandemic Levels

If you want an indication that things are returning to normal after two years of covid-19, look to airports. After visitor numbers plummeted due to bans and restrictions, they started to increase again earlier this year when such measures were eased. But now, as passengers flock to airports, the industry is struggling to keep up with demand, sending flight delays and cancellations back to pre-pandemic levels.

That’s right, Reuters report that in the first seven months of this year, more flights were delayed or canceled in the US than in the same period in 2019. According to Reuters:

US-based airlines eliminated 128,934 flights between January and July, up about 11% from pre-pandemic levels, according to data from flight tracking website FlightAware. Delayed flights have also reached nearly a million this year.

American Airlines Group Inc canceled 19,717 flights, the most of any major US airline, followed by Southwest Airlines Co with 17,381 flights. Delta Air Lines Inc reported the fewest number of flight cancellations with about 10,000 flights.

Flight delays and cancellations are caused by everything from unpredictable weather to shortages of pilots and other essential airline staff. The increase in trip cancellations comes as tourist numbers once again approach pre-pandemic levels.

And not just in the US, where such problems are playing out. In recent months, London’s Heathrow Airport was in trouble to keep up with passenger numbers, despite the former being one of the busiest airports in the world.

Reverse: I found the shortcut

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