The Cut Inflation Act, the main climate bill, was signed today, changing the availability of tax credits for electric vehicles. Now only electric vehicles assembled in North America are eligible for the credits. Today, the US government released a preliminary list of vehicles currently eligible for the $7,500 electric vehicle tax credit.
The new Climate Bill contains a number of provisions affecting the availability of EV credits, and these provisions will be phased in over the coming months and years. Most of them focus on increasing production of electric vehicles and batteries in the United States.
But delays in implementing various provisions have created a lot of confusion in the EV community about which vehicles qualify and when.
The Department of Energy’s Alternative Fuels Data Center has published the list of vehicles with final assembly in North America, and we have copied the list below.
We’ve added links where possible so you can search local dealer inventory for the car you’re looking for. We have also added our own notes in the “note” column to clarify eligible models.
The list includes vehicles that are assembled in North America but for which manufacturers are currently exceeding the 200,000 cap on the previous credit. This cap is lifted on January 1, 2023, so cars labeled as “manufacturer’s sales cap reached” will not be eligible for the electric car tax credit until Next year.
Note that this list is not set in stone and will change as other provisions of the new electric vehicle tax credit are phased in or as manufacturers change their production plans (e.g. VW displacing 2023 ID.4 production in Tennessee). We cannot guarantee that any given customer will have access to credit and will provide the best possible information.
Additionally, some models may change production mid-year or based on specific trim levels, so you must confirm that your individual vehicle was assembled at a North American plant. The AFDC recommends that you use the NHTSA VIN decoder on your VIN to confirm it was assembled in North America. The country name of the final assembly plant can be found under “plant information” at the bottom of the page.
Additionally, the IRS has published a page explaining Section 30D of the Internal Revenue Code, which is the section that contains the electric vehicle tax credit. This includes a description of what a “binding written contract” is, which allowed EV buyers to take the “old” credit if they signed a purchase agreement before the day the IRA was signed ( today).
Other requirements that have not yet been put in place include guidelines on battery materials and critical mineral sourcing that will be developed by the IRS. The IRS is due to issue these guidelines by the end of this year, but based on the wording of the page, it feels like the taxman Most likely won’t post them until December 31 (or maybe that’s just wishful thinking on our part).
Certain vehicles will not qualify for the EV tax credit once the IRS issues its guidance because they exceed the MSRP cap of $55,000 for cars and the MSRP cap of $80,000 for the trucks. Income caps will also be put in place, meaning those earning more than $150,000 ($225,000 for head of household, $300,000 for joint filing) will not qualify.
There’s also a provision for buyers to take advantage of the electric vehicle tax credit at the point of sale, but from our reading of the bill, that doesn’t appear to come into effect until 2024.
The information in this article replaces our former article, which contained information on the “old” tax credit.
The confusion over these new electric vehicle tax credits is unfortunate, and we wish they were a little simpler and a little less sudden in their implementation. But given the difficult political situation regarding the passage of the bill, once the Senate reached a compromise, no one wanted to touch the wording of the bill. So, unfortunately, with half the Senate unwilling to support this important piece of legislation, we got what we got.
We hope that the IRS will facilitate the implementation of the new electric vehicle tax credits by putting everything in place at once and that it will respond to public comments which we will let you know as they become available.
The number of plug-in hybrids on the list is a bit unfortunate – it seems hybrids should get a smaller portion of the credits than full EVs. But given the limited battery environment we find ourselves in, PHEVs manage to electrify more vehicles per kWh than BEVs. So as long as people are plugging in their PHEVs and not just using the motor, they’re still a beneficial thing in terms of decarbonization.
Additionally, PHEV sales levels have been low for years and are not increasing, unlike BEVs. All-electric is just a more enjoyable experience, so we’re still expecting that to translate to fewer ICE motors on the road.
Overall, despite these difficulties, the aims of the legislation will help address the challenges currently facing electric vehicles (mainly supply issues), encourage more environmentally and socially responsible materials sourcing, and should apply to many more individual cars on the road. than previous legislation due to the removal of the cap per manufacturer and the extension for another decade.
Although we will have some growing pains with the new structure of the electric vehicle tax credit in the months and years to come, the law includes much-needed changes to the tax credit that should help the industry as a whole. , as well as many other climate expenditures. and actions to help reduce emissions and improve the United States’ position in the green energy economy of the future, so overall we’re happy with the law.
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