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Stellantis (STLA.US) and some of Volkswagen's electric vehicles have been removed from the US subsidy list.

AInvestFriday, Jan 3, 2025 8:10 am ET
1min read

Intellidex learned that some plug-in vehicles from Stellantis(STLA.US) and Volkswagen will not qualify for the U.S. tax credit under stricter rules that took effect this week. The Volkswagen ID.4 electric crossover will not qualify for the full $7,500 tax credit, according to the latest list from the U.S. Energy and Environmental Protection Agency. Models from Nissan and Stellantis that previously qualified for the top $3,750 subsidy are now ineligible.

The reclassification is part of President Biden's Inflation Reduction Act, which tightens domestic sourcing requirements for battery parts and raw materials used to make batteries. Only 18 electric vehicles and plug-in hybrids are currently eligible for the credit, down from 22 last year.

As President-elect Trump prepares to take office later this month, European carmakers will face an even tougher task in the U.S. He has made eliminating Biden's EV subsidy initiative a key part of his economic platform and has threatened to impose tariffs on foreign-made cars.

Volkswagen has struggled in the U.S. market for years. As European markets slow and competition in China heats up, the company's upcoming Scout series of electric SUVs and pickup trucks are being touted as key to expanding its market share. Meanwhile, Volkswagen is cutting costs in Germany and last November named former Porsche and Rivian executive Kjell Gruner as its head of the Americas to boost sales there.

Stellantis has been plagued by product delays and bloated U.S. inventories, leading to the departure of its CEO last year. The company is also facing headwinds at home: It saw a 46% drop in its Italian passenger car production last year as demand for electric models such as the Fiat 500 lagged.

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