The Treasury Department revealed in April which cars will be eligible for the new electric vehicle tax credits. Fewer models are eligible than in previous years, but some of the most well-known EVs still qualify. Under the new rule, consumers can get up to $7,500 back in tax credits on eligible cars.
Sixteen new models and some of their variations are eligible for all or half of the new credit, while nine are no longer eligible (at least for now). Here’s the list:
- 2022-2023 Chrysler Pacifica PHEV
- 2022-2023 Jeep Wrangler PHEV 4xe
- 2022-2023 Jeep Grand Cherokee PHEV 4xe
- 2022-2023 Ford F-150 Lightning (standard and extended range)
- 2022 Ford e-Transit
- 2022-2023 Ford Mustang Mach-E (standard and extended range)
- 2022 Ford Escape Plug-in Hybrid
- 2022 Lincoln Corsair Grand Touring
- 2023 Lincoln Aviator Grand Touring
- 2022-2023 Chevrolet Bolt
- 2022-2023 Chevrolet Bolt EUV
- 2023-2024 Cadillac LYRIQ
- 2024 Chevrolet Silverado EV
- 2024 Chevrolet Blazer EV
- 2024 Chevrolet Equinox EV
- 2022-2023 Tesla Model 3 Standard Range RWD
- 2022-2023 Tesla Model 3 Performance
- 2022-2023 Tesla Model Y AWD
- 2022-2023 Tesla Model Y Long Range AWD
- 2022 Tesla Model Y Performance
There are two major requirements automakers must meet if they want to be eligible for the $7,500 tax credit: a critical mineral requirement and a battery component requirement, each worth $3,750. A certain percentage of critical minerals used in EV batteries must be extracted or processed in the US, or a country with a free-trade agreement – or a certain percentage of the battery components’ value must be manufactured or assembled in North America. The list is expected to change in the coming months and years as some brands plan to build factories in the US to assemble their vehicles.
What about used and leased EVs?
A separate tax credit applies to used EVs, and it doesn’t carry such stringent requirements. Used EVs qualify for less of an overall tax credit but come with certain income requirements. Leased vehicles can also qualify for a $7,500 tax credit without some of the strict rules about battery contents and assembly, meaning leasing could be a better choice for consumers than buying.
An updated list of eligible new and used EVs can be found at www.fueleconomy.gov. Under the new rule, consumers can get up to $7,500 in tax credits on eligible cars.
The new rules were meant to help move the supply chain for critical minerals used in EV batteries, solar panels and smaller rechargeable batteries away from China.
Experts say consumers and dealers will have to parse federal guidance to figure out which cars are eligible, moving forward, and some automakers are scrambling to develop tech that will assist customers. GM has an app that allows potential customers to use a car’s VIN to “decode” how much of the $7,500 credit will apply.
The law is meant to benefit middle-class, rather than wealthy EV buyers, but a little “homework” may be necessary to determine which vehicles apply. The provisions were also intended to help speed up EV adoption through companies that lease large commercial fleets. Several automakers have advocated for programs where they or their affiliated dealers would be the buyers, and then pass on the savings to consumers who take on lease agreements, but with lower payments.
Some analysts and lobbyists say leasing could work well for consumers who want to swap out cars for better battery life or to take advantage of improving technologies.
Sources: CNN, The Washington Post
