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In this episode:
- MichMash founding co-host Jake Neher returns!
- What the Inflation Reduction Act will mean for Michigan automakers
- How the $7,500 EV tax credit has changed after passage of IRA
- CHIPS Act signals major shift for future of U.S. auto manufacturing
Big Changes Ahead for Michigan Automakers
The Inflation Reduction Act (IRA) was signed into law by President Biden, being touted as “the most aggressive action on tackling the climate crisis in American history.”
But what will that mean for the auto industry? It is too early to tell what impacts will materialize for car companies from IRA, and automakers are still uncertain bout what it means in the short-term.
One of the biggest changes will be for electric vehicle (EV) tax credits. Until now, there was an EV tax credit of up to $7,500 for someone who bought an electric vehicle. But there was a cap on how many tax credits could be claimed for a particular model of car.
Now, the IRA extends that tax credit, but it favors U.S. domestic automakers for EV’s. That could mean good news for the economy in metro Detroit and the people who work for Ford, GM, and Stellantis.
Canada and Mexico also look to be a big winner of the IRA as a result of a stipulation to assemble EVs in North America.
Supply Chain Issues and CHIPS Act
The semiconductor shortage has plagued the auto industry for the better part of the COVID-19 pandemic. Without U.S. manufacturing of semiconductors, automakers’ reliance on foreign producers has left automakers in the lurch.
But the CHIPS Act, recently signed into law by President Biden, signals a major shift in the future. As U.S. production of semiconductors comes online in the coming years, U.S. automakers will be more resilient in the face of whatever supply chain issues might emerge.