Toyota runs out of federal EV tax credits, pushing prices higher

is the latest automaker to run out of US federal tax credits, and it and GM will lose access to the $7,500 subsidy. The company exceeded the qualifying sales threshold for electric vehicles and hybrid vehicles in June, as reports.

The government limited each automaker to 200,000 EV tax credits, although Toyota and other companies . According to Toyota, losing credit will mean its electric vehicles become more expensive for consumers, which will slow the transition from internal combustion engine cars to electric vehicles.

However, Toyota and have pushed back on a plan by the Biden administration to provide additional loans to unionized automakers. GM, Ford and Stellantis (the parent company of Fiat and Chrysler) have unionized plants. The Build Back Better Act, which passed through the House but stalled in the Senate, also included additional credit for cars made entirely in the United States.

As things stand, Toyota’s tax credits will be phased out over a one-year period. Bloomberg notes that the value of the subsidy will be halved twice before it expires. However, Toyota will still be able to take advantage of state-level incentives.

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