Ford EVs qualify for US tax credit – at least partially

Future Ford customers in the US can rejoice: The US American carmaker says that all three of its EVs as well as its PHEVs there qualify for the US Inflation Reduction Act tax credit.

This comes after the US Treasury Department published new guidelines at the end of March, outlining the conditions electric vehicles must meet to qualify for the incentives. To that end, 40 per cent 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 per cent of the vehicle’s battery components be manufactured or assembled in North America. In both cases, the percentage will rise in the coming years.

In the case of Ford, all of its vehicles available in the US are assembled in Nord America, which is why all of its electric cars qualify for at least half of the tax incentives. Because the Mustang Mach-E and E-Transit in the US use nickel cobalt manganese (NCM) battery cells made by LG Energy Solutions, these vehicles only qualify for the $3,750.

That could change, however. LGES 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 – once that is through, these EVs could also be eligible for the full $7,500 in tax credits. On top of that, all customers taking delivery of one of these vehicles before 18 April will also receive the full amount.

The Ford 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. Moreover, the companies are building four joint battery factories in the US – in Kentucky and in Tennessee. This comes after Ford and SK On announced a joint venture in 2021.

Ford will also build an LFP battery factory in the US, using CATL technology. Ford will fully own the site, and CATL will licence the technology and provide assistance. That way, Ford’s using LFP technology will also be eligible for the tax incentives. Last year, Ford announced that it would use LFP batteries made in China by CATL in certain Mustang Mach-E electric SUVs and the Ford F-150 Lightning pick-ups offered in North America and Europe.

ford.com