Following the g of the Inflation Reduction Act, the list of fighting climate change, lowering health care costs and raising taxes on multi-billion dollar corporations. The Act also extends federal tax credits for people buying electric cars. However, unlike earlier, only cars manufactured or assembled in North America are eligible for the rebate, meaning the vast majority of the 72 previously eligible models no longer qualify.
Also, note that some models in the new list will soon become ineligible once the IRS issues its own guidelines for the rebate, which will include requirements about sourcing and pricing. Once that happens, the tax credit will only be available to individuals earning $150,000 or less or up to $300,000 for t filers. In addition, eligible cars can only include minerals extracted or processed in a country with a free trade agreement with the U.S. Finally, the battery in these cars also needs to have a large percentage of components manufactured or assembled in North America. Once all the conditions mentioned above are met, the clean fuel rebate will be available on sedans priced up to $55,000, as well as vans, SUVs, and trucks with MSRPs up to $80,000.
According to an official press release by the U.S. Department of Energy, more than two dozen vehicles still qualify for the federal rebate. Most of those are from the model year 2022, while the rest are from the model year 2023. Starting with the latter, the BMW 3-series plug-in (330e), Chevy Bolt EV, Cadillac Lyriq, Mercedes EQS and Nissan Leaf will qualify for the rebate.
EVs That Qualify For The Federal Tax Rebate
The eligible cars from the model year 2022 include the Audi Q5 EV, BMW 3-series plug-in (330e), BMW X5 (XDrive 45e), Chevy Bolt EUV and EV, Chrysler Pacifica PHEV (plug-in hybrid electric vehicle), Ford Escape PHEV, Ford F-Series (F-150 Lightning), Ford Mustang MACH E, Ford Transit Van, Hummer Pickup, Hummer SUV, Jeep Grand Cherokee PHEV, Jeep Wrangler (4xe PHEV), Lincoln Aviator PHEV, Lincoln Corsair Plug-in, Lucid Air, Nissan Leaf, Rivian EDV, Rivian R1S, Rivian R1T, Tesla Model 3, Tesla Model Y, Tesla Model S, Tesla Model X and Volvo S60 (Recharge).
It is worth noting that this is just the initial list and is subject to change based on several factors. While currently-ineligible vehicles can adjust their manufacturing plans to comply with sourcing requirements, eligible EVs can move out of the list if they increase their prices or make other changes. Of course, some of these cars (like the Tesla Model S and Model X) will go out of the list once the IRS guidelines come into effect. Even with the eligible models, only some variants may qualify for the rebate due to pricing and other requirements. In the meantime, the Department of Energy's Alternative Fuels Data Center (AFDC) recommends that buyers check the VIN of their target EV on the NHTSA VIN decoder and check out the 'Plant Information' field at the bottom of the page to confirm that it was assembled in North America.