Section 45W
Background
The 45W Commercial Clean Vehicle Credit provides a $7,500 tax credit for the purchase of new commercial clean vehicles, including leased private consumer vehicles. For all leased vehicle purchases - a significant portion of U.S. clean vehicle sales - this tax credit has no restrictions on FEOC ownership, origin of sourced material, or U.S. production.
BATT Coalition’s 2025 Goals
Restrictions on Foreign Entities of Concern (FEOCs)
Currently, firms owned and backed by FEOCs (China, Russia, Iran, and North Korea) are eligible to receive federal tax credits through the Section 45W Commercial Clean Vehicle Credit.
Goal: The BATT Coalition advocates for aligning the Section 45W credit by adding FEOC restrictions similar to those found in Section 30D to prohibit FEOCs from accessing federal tax credits.
Changes to Sourcing and Production Requirements
The Section 45W tax credit does not restrict the material sourcing or production requirements. Any company claiming the Section 45W tax credit can have production lines outside of the U.S. and source their materials from outside North America and/or non-Free Trade Agreement countries, including FEOC suppliers.
Goal: The BATT Coalition advocates for adopting North American/FTA material sourcing and U.S. production requirements to the eligibility rules for Section 45W similar to those found in Section 30D and to prohibit FEOCs from qualifying for federal tax credits.