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Senate expands tax credit for EV drivers

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Yahoo Finance autos correspondent Pras Subramanian joins the Live show to detail the latest tax credit Senate passed to promote EV adoption.

Video Transcript

SEANA SMITH: The breakthrough deal between Senator Chuck Schumer and Senator Joe Manchin, including the extension of a 7,500 tax credit for new EVs, 4,000 for a used one. Yahoo Finance's Pras Subramanian has the details on this for us. And Pras, how big of a win is this for US automakers, or automakers in general, who are trying to speed up this adoption of EVs?

PRAS SUBRAMANIAN: Kind of a big deal here because they were-- this credit goes away after we saw 200,000 vehicles in the US. So GM and Tesla already lost that incentive. And then Toyota and I think Nissan are going to be next. So, basically, if you build a car in the US, they're getting rid of that mandate altogether. So now you can get that tax credit for as long as you make EVs.

Only issue is that there are some income requirements. Basically, if you-- joint filers can't have AGI above 300,000 and single filers, 150,000. And then for the cars, they want to target more cars that are more affordable. So trucks and vans have to be $80,000, and then cars and sedans, $55,000, around that.

So really kind of good deal for people, targeting people who need the help to afford an EV. So I think it's a good plan altogether. One other thing I would say is that there's also requirements where the car's made. It's gotta be in the US. And also battery materials, they want to phase that in and have more stuff built here and materials from the US.

DAVE BRIGGS: Those income cutoffs look like they're directly aimed at Tesla owners, I mean, in particular. But there's another EV company in the news, Rivian. It's been a tough environment, a difficult year, and now it's worse-- layoffs.

PRAS SUBRAMANIAN: Yeah, we knew they were going to come down. They actually confirmed that 6% of the workforce, around 840 jobs. Supposedly, more like marketing and non-manufacturing gigs, so it's not-- it's never good to hear that. But for Rivian, they really need to execute-- they need to ramp up production. I think they're trying to just focus more on just getting the cars out on the road. And they have a 25,000 car kind of forecast for this year. They're really trying to hit that market or that mark because it's really important for the company to see that they can do that and affordably.

DAVE BRIGGS: It's a beautiful truck. Senior autos reporter Pras Subramanian, good to see you, sir. Thank you.