Revised EV Tax Credit Adds Increased Price Cap for Electric SUVs, Trucks
Electric cars aren't as new as they once were. A wide variety of automakers have some kind of electric vehicle on sale, resulting in a large amount of competition. While sedans and small SUVs are readily available, a few segments that automakers have just started to enter are pickup trucks and large SUVs. Ford, GMC, Rivian, Chevrolet, and Tesla all have electric pickup trucks on the horizon, but these pricey vehicles won't be eligible for any amount of the EV tax credit. That could change shortly.
Higher Price Caps
Under the original electric vehicle tax credit proposal, prices for electric vehicles are capped at $55,000 for sedans, $64,000 for vans, $69,000 for SUVs, and $74,000 for pickup trucks. The issue with the original framework is that the pickup trucks and SUVs coming out are way too expensive to be eligible for any amount of the federal tax credit.
The GMC Hummer EV Edition 1 SUV costs $105,595 and the pickup truck is priced at $112,595. The most affordable version of the Hummer EV SUV and pickup truck will be priced at $79,995, making them too expensive for the federal tax credit, too.
Democrats in the U.S. House of Representatives have unveiled some changes to President Biden's Build Back Better framework. Under the new EV tax credit proposal, the cap would be revised to $80,000 for SUVs, trucks, and vans. This is quite the increase and would open the door for consumers to get credit for purchasing a more expensive vehicle. While things are changing for SUVs, vans, and pickup trucks, they're staying the same for sedans. So, sedans with an MSRP that exceeds $55,000 will not be eligible for any tax credit.
New Income Brackets
There are also some proposed changes to who's eligible under the income brackets. Single filers must have an adjusted gross annual income of less than $250,000 to be eligible for the full amount of the federal tax credit. For joint filers, the figure is $500,000. Previously, the figures were much higher, at $400,000 for single filers and $800,000 joint filers.
The revised EV tax credit also has language that raises the federal tax credit to up to $12,500. The qualifications, though, have angered some automakers and lawmakers. All automakers qualify for the current $7,500 federal tax credit. To get the rest, the vehicle must be built in the U.S., be built by unionized employees, and have U.S.-made batteries.
House Democrats were supposed to vote on the Build Back Better proposal at the beginning of the month, but that hasn't happened yet, as there's a lot of opposition to the bill. If it does pass in its current form, it would be a big boost for EV consumers.
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