New US Tax Credit Regulations Reduce the Number of EVs Eligible

According to new federal regulations on Tuesday, ten electric or plug-in hybrid vehicles will be eligible for a $7,500 U.S. tax credit, and another seven might receive $3,750.

However, most of the more than 60 electric or plug-in hybrid vehicles on sale in the United States won’t qualify for any tax credits due to Treasury Department regulations and other terms of last year’s Inflation Reduction Act.

As a result, President Joe Biden’s ambitious aim of having half of the new passenger vehicles sold in the United States run on electricity by 2030 could be further delayed.

Nine vehicles were dropped due to the new regulations, which limit the number of battery materials and components that may be imported from nations without free trade agreements with the United States.

The Tesla Model 3 Performance, Tesla Model Y, Ford F-150 Lightning, Chrysler Pacifica, and Lincoln Aviator Grand Touring plug-in hybrids are among the ten vehicles that qualify for the full $7,500 credit. The Cadillac Lyriq, the Chevrolet Silverado electric pickup, the incoming Chevy Equinox small SUV, and General Motors’ best-selling Bolt and Bolt EUV are among the five models that will be eligible this year.

The seven vehicles that potentially receive a $3,750 credit include the Jeep Wrangler and Grand Cherokee plug-in, Ford Mustang Mach-E SUV, Escape plug-in, E-Transit electric van, the plug-in Lincoln Corsair Grand Touring, and the rear-wheel-drive Model 3 with the basic range.

To be eligible, electric vehicles or plug-in hybrids must be produced in North America.

The maximum sticker price for SUVs, trucks, and automobiles combined is $80,000; the full car sticker price is $55,000. For buyers, there are also income restrictions.

According to the Treasury Department, the updated list demonstrates that families looking to purchase an electric or plug-in vehicle “will continue to have several options to receive a full or partial tax credit in the near term” because of regulations intended to develop the domestic market for electric vehicles and their supply chain.

Although many vehicles that aren’t qualified for the credit are produced outside North America, their producers are constructing battery and assembly operations here.