Only 20 EVs are still currently eligible for tax credits

The Biden administration said yesterday that about 20 models of electric vehicles would qualify for tax credits worth up to $7,500 through the end of this year. The Inflation Reduction Act, signed Tuesday, will immediately end credits for about 70% of the 72 models that were previously eligible, according to the Alliance for Automotive Innovation.

The law requires electric vehicles to be assembled in North America to qualify for tax credits, with additional provisions taking effect on January 1, 2023. Buyers with binding written contracts before the bill was signed still have access to the credits.

The Treasury Department said consumers should check their vehicle identification numbers to ensure their vehicle is still eligible, as some models are manufactured in North America and overseas.   

According to the IRS, “If a customer has made a non-refundable deposit or down payment of 5% of the total contract price, it is an indication of a binding contract.” Automakers had been urging buyers to make portions of deposits non-refundable before Tuesday’s signing.  

Portions of the law which take effect January 1, will place new restrictions on battery and mineral sourcing and price and income caps. These regulations are expected to make nearly all EVs ineligible for tax credits. The automaker group has stated they will work with the administration so the EV tax credit is “as available and beneficial to consumers as possible.”  

The law will restore General Motors and Tesla eligibility, which both lost credits after hitting the 200,000-vehicle per manufacturer cap. It remains unclear how many models will remain eligible in 2023 under the new sourcing and price caps.  

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