What New Tax Credit Rules for EVs

AUTOGOS TEAM

AUTOMOBILE

About 42 plug-in hybrids and 30 new EVs were qualified for federal income-tax incentives as of August 15.

These figures decreased to eight and ten on August 16. From January 1, 2023, there will be an increase to 11 EVs that qualify.

The Inflation Reduction Act, which President Joe Biden signed into law on August 16, is the cause of these modifications.

The law only contained one immediate-application provision, but it was a significant one. Since that time, only automobiles built in the United States, Canada, and Mexico are eligible for the $7500 credit, effectively eliminating almost all eligible vehicles.

With the lifting of the 200,000 qualifying EV unit cap, General Motors and Tesla vehicles are once more eligible.

The GMC Hummer and various Teslas are however no longer eligible due to new price limitations on qualified vehicles—$55,000 for cars and $80,000 for trucks and SUVs (Models S and X, higher-trim Model 3s).

Another modification is that the tax credit's amount is now independent of battery size.

You are eligible for the full $7500 stipend if your electric vehicle or plug-in hybrid has a battery capacity of at least 7.0 kilowatt hours.

For the first time, secondhand cars bought through a dealer are permitted. They now receive a credit of up to 30%, with a cap of $4000.

The used EV or plug-in hybrid must be at least two model years old and cost no more than $25,000.