Automotive component manufacturers and engineering companies may be eligible for R&D tax credits for performing qualified research activities. For example, the following activities may be eligible for R&D tax credits:

  • Performing technical research on new and/or improved products or processes (e.g. environmental impact, consumer safety)

  • Performing technical research or experimentation on new and/or improved material usage (plastic injection molding, metal stamping, glass tempering, and rubber production, etc.)

  • Performing technical research and evaluation through computer-aided design (CAD) or modeling simulation of prototype parts

  • Developing new and/or improved engine, transmission, suspension, or other sub-components per customer specifications and requirements (e.g. aftermarket parts, assemblies for engine cooling, exhaust systems)

  • Developing new and/or improved automotive topping fabrics, interior and exterior trim components, or interior electronic controls (seat heating and adjustment, defrosting / thermostat control, etc.)

  • Developing new and/or improved plastic-injection molds and molding processes

  • Developing new and/or improved automated welding and assembly systems

  • Developing new and/or improved electronic navigation and sensory systems (GPS location mapping, autonomous driving support hardware / software, etc.)

  • Developing new and/or improved software control systems 

  • Designing new and/or improved manufacturing operational protocols

  • Designing new and/or improved manufacturing equipment and machinery

  • Designing, constructing and testing product prototypes (e.g. vehicle body molds, alternator, battery, serpentine belts, drive-train system, transmissions, airbags, brakes, tires, windows, electrical components)

  • Designing and testing new and/or improved products pursuant to evolving regulatory safety and environmental requirements such as the National Highway Traffic Safety Administration (e.g. dynamic impact testing, data acquisition systems and sensors for occupant safety testing, or in-dummy applications) or the Environmental Protection Agency.

  • Integrating new and/or improved engineering and assembly efficiencies to collaborative manufacturing operations (e.g. accident-testing prototypes, automated body assembly, minimizing material waste)

  • Testing prototype extrusion machinery, computer numerical control (CNC) machinery, or other automotive equipment

  • Testing first article prototypes and processes per quality assurance standards and requirements (e.g. dimensional analysis, visual inspections, non-destructive testing)

  • Evaluating alternative material testing

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