The 2022 EV tax credit score has many individuals prepared to purchase their first EV. The drawback is that not all autos qualify for the new credit score, begging the query: which EVs qualify for the new tax credit score, and which do not? There’s additionally a brand new EV credit score for used electrical autos, which is a big distinction from the previous federal tax credit score for electrical autos.
What’s New in the EV Credit?
First issues first, the car you buy MUST be assembled in North America for the car to qualify for the 2022 Clean Vehicle Credit. Right off the bat, this disqualifies an enormous variety of EVs from the credit score and most probably has producers scrambling to see how they will get in on the credit score. Not solely this, however new guidelines are coming in 2023 (and past) regarding the battery of an EV and the sourcing of its supplies, and the place it is assembled.
This implies that many autos will solely qualify for a partial tax credit score in 2023 and past if the satisfactory proportion of the supplies in the battery aren’t sourced as stipulated by the invoice. The good news is that in the event you entered right into a legally binding settlement to buy an EV earlier than August 16, 2022, the authorities is permitting you to go forward and buy the car abiding by the previous guidelines, even in the event you take supply of the car after August 16, 2022.
The weirdness begins if you are going to buy a car after August 16, 2022, however earlier than January 1, 2023. In this case, the identical guidelines of the previous EV credit score apply to your buy (together with the indisputable fact that some producers’ autos do not qualify resulting from too many autos offered). Not solely this however the manufacturing limitation that states that the car have to be assembled in North America additionally applies to your buy. There are additionally new limitations on the folks that may apply.
If you are a single filer, the most you possibly can earn yearly to qualify for the new EV credit score is $150,000. For {couples} that file joint taxes, the most is $300,000 a 12 months. This is not that huge of a deal and ensures that individuals that truly want the credit score (lower-income people) can get some good reductions on their subsequent EV. The EV credit score additionally does away with discounting ridiculously priced EVs. The new credit score solely applies to sedans priced beneath $55,000. In the case of SUVs, vans, and vans, the cutoff is $80,000.
The new EV credit score may even do one thing that sure producers will completely love: it takes away the producer cap on what number of qualifying EVs they will promote earlier than the tax credit score runs out. Now, Tesla, GM, and Toyota can be a part of the social gathering as soon as once more. One of the most enjoyable elements of the new EV credit score is the indisputable fact that used automobiles with a worth as much as $25,000 can qualify for as much as a $4,000 credit score. This is all nice, however the ironic half is that there is a risk that hardly any new EVs will qualify for the full tax credit score as soon as the battery restrictions come into play in 2023.
Regardless, at the second, there are some EVs which you can exit and purchase proper now that qualify for the tax credit score resulting from assembly the assembled in North America provision and abiding by the previous guidelines as effectively. Read on to seek out out which autos qualify in line with a listing offered by the Department of Energy. It’s additionally price noting that the US Department of Transportation has offered a (*5*) instrument to confirm the plant that manufactured the car you are contemplating shopping for. Therefore, even when a car is on the listing offered by the Department of Energy, it’s essential to verify it utilizing the VIN instrument to make sure it absolutely meets the standards.
1. Ford F-150 Lightning
The F-150 at present qualifies for the EV tax credit score for autos offered between August 16, 2022, and January 1, 2023. According to the listing of autos assembled in North America by the Department of Energy, the F-150 is at present good to go. Another issue to think about is that Ford is beneath the complete car’s offered cap (for the second), so the F-150 is one among the finest selections if you wish to benefit from the present tax credit score, particularly in the event you want an EV pickup.
2. Ford Mustang Mach-E
Ford strikes once more with the Mustang Mach-E. The Mach-E can also be assembled in North America and beneath the worth threshold, which does not matter at the second, however will come into play subsequent 12 months. The Mach-E begins at $43,895 and is one among the nicest-looking EV SUVs on the market.
3. Rivian R1T
The Rivian R1T qualifies for the EV tax credit score for the second. But, in order for you a Rivian, and want to get it a bit cheaper, now could be the time to purchase it. The R1T (in concept) does qualify when it comes to worth for subsequent 12 months’s tax credit score, nevertheless it’s doable that discovering a mannequin that slides beneath that worth requirement will show to be very troublesome.
4. Ford E-Transit Van
The Ford E-Transit Van is one other nice car that qualifies for the tax credit score because it at present stands. Again, in the event you’re contemplating an EV, shopping for it now might be the finest wager. Otherwise, resulting from elevated restrictions, you threat solely getting a partial tax credit score subsequent 12 months.
5. Nissan Leaf
The Department of Energy’s listing consists of the Nissan Leaf as a car that qualifies for the tax credit score, which is nice news for folks wanting so as to add the Leaf to their steady this 12 months.
The Federal EV Credit Is Complicated
One of the most enjoyable elements of the new EV credit score is the used EV credit score. With the new provisions, you may get a used EV tax credit score price as much as $4,000. The car can’t exceed a worth of $25,000, and plenty of extra restrictions have to be met. While the new tax credit score as a complete is a good incentive, the credit score is totally rife with caveats and problems. It’s clear that navigating the necessities for this credit score might be extra bother than it is price for many individuals.