VW Makes Canadian Deal to Build EV Batteries in North America

What This Means for the Lineup of Volkswagen Electric Vehicles

There are a few big advantages to purchasing an electric vehicle. First, it ensures that you never have to deal with the gas pumps ever again. During a time in which gas prices are extremely volatile and inflation is at a 40-year high, that is welcome news. You can put that money back towards your monthly grocery and bill budget.

Another big advantage of new electric cars is that you can usually get a tax credit on the purchase. To bring you up to speed, the Inflation Reduction Act of 2022 passed by the Biden administration offered a tax credit up to $7,500 based on the vehicle’s traction battery capacity and the gross vehicle weight rating. However, that was for all vehicle purchases before August 17th, 2022. Things will be different moving forward.

How the Tax Credit on Electric Vehicles Will Work

The tax credit on new electric cars is scheduled to change after December 31st, 2022. It will be broken up into two separate credits. 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, to be eligible for the critical mineral and battery components tax credits, the manufacturing and assembly of electric vehicle batteries must primarily be done on North American soil. As it stands, a VW electric car for sale would not qualify for these tax credits because they are manufactured in Europe.

The Canadian Deal and Tennessee-based VW Plant

Considering the importance of this electric vehicle tax credit eligibility, VW has made some crafty maneuvers as of late to ensure their customers will qualify for it. First, Volkswagen has signed what is called a memorandum of understanding with the Canadian government to officially begin talks about bringing some of their electric vehicle battery manufacturing to their mineral-rich country. It is believed VW will be able to secure access to lithium, cobalt, and nickel, which are all vital to the operation. Although it’s not confirmed yet, experts believe that VW plans to build a dedicated Gigafactory in Canada to manufacture electric vehicle batteries.

The other critical piece of news about how VW plans to manufacture its ID.4 electric vehicle lies in Chattanooga, Tennessee. Pablo Di Si, the new president and CEO of the VW Group of America, is estimating that 90,000 electric vehicles will be manufactured domestically in 2023. According to him, the VW ID.4 is expected to qualify for the full $7,500 U.S. tax credit.

How to Test Drive the VW ID.4

Although the VW ID.4 doesn’t qualify for the federal tax credit yet, its starting MSRP of under $38,000 makes it well worth checking out. Compared to other auto manufacturers who have been dominating the electric vehicle space, its current price tag is more than competitive.

The VW ID.4 is also a top performer in its class, able to drive up to 275 miles on the single charge (Pro model) while providing all the power and handling one would expect from an SUV. It’s also worth mentioning that the VW ID.4 was the winner of the 2021 World Car of the Year Award and was recently named one of Wards Best User Experiences.

We have a VW ID.4 right here on the lot at VW Clear Lake that you can test drive. You can also build and reserve a VW ID.4 of your very own so that you can get the trim level and optional features that you want. This is the best way to get a VW electric car for sale that perfectly matches what you want.

Looking for New and Used Cars? Visit VW Clear Lake – Your Local Volkswagen Dealer

Not yet in the market for an electric vehicle? No problem! As the leading Volkswagen dealer here in Houston, we carry a wide variety of new sedans, compacts, and SUVs made to fit any driving style in budget. We’ll be happy to help you out with financing your new vehicle.

We also carry a wide variety ofused cars, and certified pre-owned vehicles that have undergone a 100+ point inspection. Finally, you can find all sorts of great deals on VW products and services and our specials section. With our current deflation sale, you can get any new VW vehicle for $500 off its standard MSRP.

VW Clear Lake is conveniently located at 15100 Gulf Fwy in Houston. Feel free to stop by to test drive an electric vehicle or one of our many other new and used vehicles. You can also contact us at (832) 432-7969 or email us directly using the contact form on our website.

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