Good luck meeting all the requirements.
The updated guidelines for the $7,500 Federal EV tax credit arrived on April 18th, 2023, meaning several vehicles no longer qualify. With that in mind, here are the few EVs and PHEVs (plug-in hybrids) still eligible.
The Inflation Reduction Act of 2022 changed which EVs get a tax break while extending the credits another decade through 2032. It added strict guidelines to qualify for the federal tax credit depending on where the battery materials are sourced and if manufacturing occurs on U.S. soil. The idea is to bring back manufacturing stateside, but the tax credit is also a total mess now. It also means the vehicle you want probably no longer qualifies.
For buyers to claim the full $7,500 tax credit, 40% of critical battery minerals must be sourced in the U.S. or from countries with which we have a trade agreement. If it’s from China, it won’t qualify. Additionally, a percentage of the battery parts must also be made in North America.
If the vehicle meets both requirements and the buyer has a certain income level, they’ll qualify for the full $7,500. With the update on April 18th, only 16 current or upcoming models are now eligible for a full or partial tax credit. Here’s the full list:
Full Tax Credit Eligible ($7,500)
Partial Tax Credit Eligible ($3,750)
Again, it’s a bit confusing. If only one of those two battery requirements is met, the model will only qualify for a partial federal EV tax credit of $3,750.
As you can see, both lists are not only very short, but they’re leaving out some top-rated electric vehicle models. We’re talking about the popular KIA EV 6, Hyundai IONIQ 5, Rivian R1T and R1S, and Volkswagen ID.4, not to mention vehicles from Audi, Porsche, GMC, Tesla, Nissan, Mercedes, and others.
When the Hyundai IONIQ 5 first arrived, qualified buyers could get it for under $33K, thanks to the Federal EV tax credit. Since then, pricing has increased due to supply and demand, and now it no longer qualifies. That’s bad news for consumers and terrible news for Hyundai.
As a result, manufacturers like Hyundai and KIA recommend that buyers lease an EV instead, using a “loophole” allowing the automaker to still pass on the EV tax credit savings and lower monthly payments for lease programs.
When you widdle down the list above to currently available EVs that qualify for the full $7,500 tax credit, there are only six models to choose from. That said, we expect many more vehicles to be eligible in 2024. However, I have a feeling these rules will continue to change and adapt as the EV market charges ahead.
Source link
