There are a number of provisions in the new climate bill that affect the availability of EV credits, and these provisions will be phased in over the coming months and years. Most of them are focused on bringing more EV and battery production to the US. But the phase-in times of various provisions have created a lot of confusion in the EV community about which vehicles will qualify and when. The Department of Energy’s Alternative Fuels Data Center has published its 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 dealers’ stock for the car you’re looking for. We’ve also added our own notes in the “note” column to clarify which models qualify. The list includes vehicles that are assembled in North America, but for which manufacturers currently exceed the 200k cap in the previous credit. That cap is lifted on January 1, 2023, so cars labeled “manufacturer sales cap met” won’t qualify for the electric car tax credit until next year. Note that this list is not written in stone and will change as other provisions of the new EV tax credit are phased in or as manufacturers change their production plans (for example, VW is moving 2023 ID.4 production to Tennessee ). We cannot guarantee that any customer will have access to credit and that we provide the best information we can. In addition, some models may change production mid-year or based on specific trim levels, so you should confirm that your individual vehicle was assembled in a North American factory. AFDC recommends using the NHTSA VIN Decoder on your VIN to confirm it was assembled in North America. The name of the country of the final assembly plant can be found under “installation information” at the bottom of the page. Additionally, the IRS has released a page explaining Section 30D of the Internal Revenue Code, which is the section that contains the EV tax credit. This includes a description of what a “written binding agreement” is, which allowed EV buyers to get the “old” credit if they signed a purchase agreement before IRA signing day (today). Other requirements that have yet to be phased in include battery material guidelines and critical mineral sourcing guidelines to be developed by the IRS. The IRS needs to issue these instructions by the end of this year, but from the language on the page, it looks like the IRS likely won’t issue them until December 31st (or maybe that’s just wishful thinking on our part). Some vehicles will not qualify for the EV tax credit once the IRS issues its guidance because they exceed the MSRP ceiling of $55,000 for cars and $80,000 MSRP for trucks. Income caps will also be put in place, meaning those earning more than $150,000 ($225,000 head of household, $300,000 filing jointly) will not qualify. There’s also a provision to allow buyers to take advantage of upfront EV tax credit at the point of sale, but from reading the bill, that doesn’t appear to come into effect until 2024. The information in this article supersedes our older article, which had information about the “old” tax credit.
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The confusion surrounding these new electric vehicle tax credits is unfortunate, and we wish their implementation was a little simpler and a little less sudden. But given the difficult political situation surrounding the passage of the bill, once the Senate reached a compromise, no one wanted to touch the language of the bill. So, unfortunately, with half the Senate unwilling to support this important legislation, we got what we got. We hope that the IRS will make it easier to implement the new electric vehicle tax credits by introducing everything at once and will respond to public comments that we will let you know about when they become available. The number of plug-in hybrids on the list is a bit unfortunate—it seems like hybrids should get a smaller share of the credit than full EVs. However, given the battery-constrained environment we are 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 engine, they are still beneficial in terms of decarbonisation. Also, PHEV sales levels have been low for years and are not increasing, while BEVs are increasing. All-electric is just a more enjoyable experience, so we expect this will result in fewer ICE engines on the road. Overall, despite these difficulties, the aims of the legislation will help address the challenges currently facing electric cars (primarily supply challenges), encourage more environmentally and socially responsible material sourcing, and should apply to many more individual cars down the road from previous legislation by lifting the per-manufacturer cap and extending it for another decade. While we will have growing pains with the structure of the new EV tax credit in the coming months and years, the law includes some much-needed changes to the tax credit that will help the industry as a whole, along with many other climate spending and action to reduce emissions and improving the US’s position in the green energy economy of the future, so overall we are happy about the legislation. FTC: We use affiliate links that automatically earn you income. More. Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.
