The Inflation Reduction Act, which President Joe Biden signed Tuesday, says that if automakers want their electric vehicles to qualify for tax credits, they will have to have final assembly in North America. The law, effective immediately, ends the credits for about 70 percent of the 72 models that were previously eligible, according to the Alliance for Automotive Innovation.
regarding 20 2022 model year and early 2023 model year vehicles however, it will reduce EV tax credits to $7,500 by the end of the year under the new legislation. Any manufacturer that has vehicles assembled in North America and has reached its cap of 200,000 EV credits will not qualify for the newly named Clean Vehicle Credit this year. This leaves the following models still eligible:
2022 model year electric vehicles eligible for the Clean Vehicle Credit
- Audi Q5
- BMW 3-series Plug-In and BMW X5
- Chrysler Pacifica PHEV
- Ford F series; Ford Mustang Mach E; Ford Transit Minibus
- Jeep Grand Cherokee PHEV
- Jeep Wrangler PHEV
- Lincoln Aviator PHEV and Lincoln Corsair Plug-in
- Clear air
- Nissan Leaf
- Rivian EDV; Rivian R1S; Rivian R1T
- Volvo S60
2023 model year electric vehicles eligible for the Clean Vehicle Credit
- BMW 3-series Plug-In
- Mercedes EQS
- Nissan Leaf
EVs that have used up their tax credits
- 2022 Chevrolet Bolt EUV; 2022 Chevrolet Bolt EV; 2023 Bolt EV
- 2022 GMC Hummer Pickup and SUV
- 2022 Tesla Models 3, S, X and Y
- 2023 Cadillac Lyriq
More info
Signing the law means that Electric cars sold by Toyota, Hyundai, Porsche, Kia and others will no longer be eligible for the tax credit. However, if a customer made a non-refundable deposit or down payment of 5 percent of the total cost of a contact before Biden signed the law, they may still qualify. Many automakers were urging customers to finalize trades and put down deposits to get a few more tax credits.
The additional regulations are expected to enter into force on 1 January 2023. For example, there will be new restrictions on the supply of batteries and minerals, as well as price and income caps. The start of the year will also reset the clock for General Motors and Tesla to be eligible for EV tax credits again.
By 2024, buyers will be able to transfer their credits to dealers when purchasing the vehicles to reduce the selling price.
The US Department of Energy noted that some manufacturers produce vehicles in different locations. The location of the structure can be confirmed by reference to the vehicle identification number using the VIN decoder tool.