Federal Tax Credit on EVs Still Applies to American-Made Vehicles
With President Joe Biden signing the Inflation Reduction Act earlier this week, things for consumers looking to purchase an electrified vehicle are going to change drastically. While some of the changes will occur next year and a few more will take place in a few years, one immediate change is taking place for the rest of the year. As Green Car Reports, the Department of Energy and Internal Revenue Service issued some preliminary guidance for the rest of the 2022 calendar year.
Federal Tax Credit Still Available
As the outlet points out, shoppers looking to claim the new Clean Vehicle Credit, yes the federal tax credit for electrified cars has a new name, have two things that they'll have to focus on. For one, the vehicle cap on electric vehicles won't be lifted until 2023. So, if you're looking to purchase a Tesla or vehicle from General Motors, you won't be eligible for the tax credit. You could wait until January 2023.
The second thing is that in order for electric vehicles to be eligible for the Clean Vehicle Credit, it must have a final assembly point in North America. That means electric cars will have to be built in the U.S., Mexico, or Canada in order to be eligible for the federal tax credit. This is a requirement for purchases made on or after August 16, 2022.
Cars Eligible For Tax Credit
There's some more good news for consumers. The price cap on vehicles won't go into effect until January 1, 2023. So, the list of electric vehicles that are eligible for the credit, which Green Car Reports put together, is fairly lengthy for the rest of 2022:
Audi Q5 plug-in hybrid
BMW X5 xDrive45e
Chrysler Pacifica Hybrid
Ford Escape Plug-In Hybrid
Ford F-150 Lightning
Ford Mustang Mach-E
Jeep Grand Cherokee 4xe
Jeep Wrangler 4xe
Lincoln Aviator Grand Touring
Lincoln Corsair Grand Touring
Volvo S60 Recharge
Because of the Transition Rule, consumers that entered into a binding agreement to purchase an electric car from an automaker will be able to ignore all of these requirements. We know that Rivian, Lucid, and Fisker reached out to shoppers to have them sign an agreement before President Biden signed the Inflation Reduction Act.
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