VW Has a Canadian Deal in the Works to Advance Production of EV Batteries

How This Will Improve the Process of Sourcing Materials for Volkswagen Cars

People are finally coming around to electric vehicles. The big catalyst was the huge spike in gas prices. That made everyone stop and think for a moment whether they could realistically afford spending upwards of $60 to $70 for a tank of gas. In fact, some SUV drivers were paying well over $100 per tank. Add inflation on top of it and you can see why drivers are reevaluating the future of their automobiles.

A perfect storm is currently in effect. Used vehicles are fetching a pretty penny on the trade-in market and electric cars are now more affordable than ever. The award-winning all-electric SUV – the VW ID.4 – starts at an MSRP of $37,495 and can get up to 275 miles on a single charge (Pro model). That is more than enough mileage to get you through your weekly commute at a sticker price that’s well beneath the main competitors in the space.

Another thing that car buyers forget about when it comes to EVs is the federal tax credit. The Inflation Reduction Act of 2022 offered a tax credit up to $7,500 based on the vehicle’s gross weight rating and vehicle’s traction battery capacity. However, that only applied to vehicles that were purchased before August 17th, 2022. The future of tax credits will be a bit different moving forward.

Breaking Down How EV Tax Credits Will Work in the Future

Let’s say that you’re looking to go all-electric with your next Volkswagen car. That means you should get familiar with the tax credit to ensure you’re taking full advantage of it. Starting January 1st, 2023, the tax credit on electric cars is going to change slightly. It breaks down as follows:

• Electric vehicles that meet the critical mineral requirements are eligible for a $3,750 tax credit
• Electric vehicles that meet the battery component requirements are eligible for a $3,750 tax credit
• Electric vehicles that meet both requirements are eligible for a $7,500 tax credit

However, there’s one major sticking point with this. To be eligible for these tax credits, the battery of the electric vehicle must have been sourced and manufactured in North America. Currently, a Volkswagen car wouldn’t qualify because they are assembled in Europe. However, that is set to change thanks to a couple recent maneuvers.

How VW is Going to Qualify Their EVs for the Federal Tax Credit

From a business and sales standpoint, you can see how important it is that Volkswagen is able to secure eligibility for the EV federal tax credit. Nobody wants to feel like they’re missing out on huge savings like that.

To address this, VW has signed what’s called a memorandum of understanding with the Canadian government. This allows them to formally begin talks of bringing a portion of their electric vehicle battery sourcing and manufacturing to Canada. If VW were to be able to source their cobalt, lithium, and nickel in Canada, this would effectively satisfy one of the tax credit requirements.

Regarding the other requirement pertaining to North American manufacturing, VW plans to do this in their plant which is located in Chattanooga, Tennessee. It is being estimated by VW higher-ups that the plant will crank out over 90,000 electric vehicles in 2023, and every one of them should be eligible for the full $7,500 tax credit.

Looking for the Perfect Volkswagen Car? Visit a Volkswagen Dealership Near You in Houston!

Now that you know more about the status of the EV tax credit and when it’ll go into effect, the next step is to find the right Volkswagen car for you and your family. Of course, we do sell the award-winning VW ID.4, and we happen to have it right now on our lot ready to test drive. Simply swing by our dealership at 19550 Northwest Fwy in Houston if you want to take it for a spin.

If you’re not in the market for an electric car – no problem! As the leading Volkswagen dealership near you, we carry plenty of new cars, used cars, and certified pre-owned vehicles that have undergone a 100+ point inspection. We also have plenty of great deals going on in our specials section. Check out our deflation sale to save up to $500 on any new VW vehicle.

Call us at (281) 532-8824 or e-mail us directly using the contact form on our website. For routine maintenance, service, or repairs, please contact the VW service center to make an appointment.

Important notification to our customers: Volkswagen Cypress SALES operations will move to its new location at 11411 Farm to Market 1960 West, Houston TX in December 2022. That same month our SERVICE operations will move to its new location at 10828 Steepletop Drive, Houston, TX, just one minute away from the SALES building!

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