Ford Motor Company announced exciting news for its customers in the United States, as the US-based carmaker announced that all of its electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) qualify for the US Inflation Reduction Act tax credit.
This comes after the US Treasury Department issued new guidelines at the end of March, outlining the conditions for EVs to qualify for these incentives. According to the new guidelines, 40% of the battery’s critical minerals must be extracted, processed or recovered in the US or in a country with which the US has a free trade agreement, and at least 50% of the vehicle’s battery components must be manufactured or assembled in North America.
Jim Farley, Ford’s CEO, expressed his excitement about the announcement and said, “We are thrilled to offer our customers these incentives that make owning an electric vehicle even more accessible. As we move toward our ambition of being carbon neutral by 2050, we will continue to focus on delivering high-quality, sustainable products that meet the needs of our customers.”
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For Ford, all of its vehicles available in the US are assembled in North America, which means that all of its EVs qualify for at least half of the tax incentives. However, the Mustang Mach-E and E-Transit in the US use nickel cobalt manganese (NCM) battery cells made by LG Energy Solutions, and therefore, these vehicles only qualify for a tax credit of $3,750.
However, this could change in the future, as LG Energy Solutions produced its battery cells for the Ford models at its plant in Wroclaw, Poland. The US and EU are currently negotiating a critical minerals agreement, and once that is finalized, these EVs could also be eligible for the full $7,500 in tax credits. In addition, customers who take delivery of one of these vehicles before April 18th will also receive the full amount.
On the other hand, the Ford F-150 Lightning uses LFP batteries made by SK On in Georgia, USA, so the electric pick-up already qualifies for the full amount. In fact, Ford and SK On are building four joint battery factories in the US, two in Kentucky and two in Tennessee, following the joint venture that they announced in 2021. Moreover, Ford is also planning to build an LFP battery factory in the US, using CATL technology. Ford will fully own the site, and CATL will license the technology and provide assistance, so that Ford’s use of LFP technology will also be eligible for the tax incentives.
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As Farley added, “Our investment in EVs is paying off not only for our customers, but also for our company and our planet. We are committed to reducing our carbon footprint, and we will continue to innovate and invest in sustainable technologies that benefit everyone.” With Ford’s commitment to producing sustainable vehicles, it seems like a bright future for the company and its customers in the US.
