The Inflation Reduction Act (IRA) replaces the previous $7,500 electric vehicle (EV) tax credit with a system designed to incentivize production and reduce reliance on foreign supply chains. The law has been criticized for its high level of complexity and harder-to-meet eligibility criteria though. Many are concerned over whether EV sales will be impacted, whether adoption might slow, and the noted price disparity between a comparable ICE vehicle that may force consumers into more affordable options.
- The new law only offers tax credits for EVs assembled in North America
- New eligibility restrictions include vehicle’s MSRP, buyer’s income, sourcing of components and rare earth metals to manufacture of the batteries
- Additional eligibility restrictions are set to take effect January 1st, 2023
- OEMs with supply chains emanating from China will have to reconfigure their sourcing agreements since EVs must be built with minerals and rare earth metals extracted or processed in a country where the U.S. has a free trade agreement
- Batteries must also have a large percentage of their components manufactured or assembled in North America
2022 & 2023 Models That Meet North American Assembly Requirements
The IRS issued preliminary guidance on the new EV tax credit rules for 2022-2023 vehicles that may be eligible for the tax credit through Dec 31, 2022.
● Audi Q5
● BMW 3 Series plug-in hybrid
● BMW X5
● Chevrolet Bolt EUV*
● Chevrolet Bolt EV*
● Chrysler Pacifica plug-in hybrid
● Ford Escape plug-in hybrid
● Ford F-Series
● Ford Mustang Mach-E
● Ford Transit
● GMC Hummer EV pickup*
● GMC Hummer EV SUV*
● Jeep Grand Cherokee plug-in hybrid
● Jeep Wrangler plug-in hybrid
● Lincoln Aviator plug-in hybrid
● Lincoln Corsair plug-in hybrid
● Lucid Air
● Nissan Leaf
● Rivian EDV
● Rivian R1S
● Rivian R1T
● Tesla Model 3*
● Tesla Model S*
● Tesla Model X*
● Tesla Model Y*
● Volvo S60
Eligible 2023 Models
● BMW 3 Series plug-in hybrid
● Bolt EV*
● Cadillac Lyriq*
. ● Mercedes EQS
● Nissan Leaf
*Vehicles produced by GM & Tesla have reached the cap of 200,000 EV credits and are not currently eligible in 2022. The cap will be eliminated in 2023.
Article Source: https://www.businessfleet.com
Link to complete source story: https://www.businessfleet.com/10181005/new-federal-law-makes-requirements-for-ev-tax-credits-more-restrictive
Disclaimer: In the News blog posts are Doering's take on the best content and the latest news in the Fleet Management Industry. Doering did not write the original source article.
