There are only a handful of electric vehicles left that qualify for the full $7,500 tax credit in the US.

The list of electric vehicles eligible for the full $7,500 federal tax credit in the US has shrunk significantly.

Thanks to new battery mineral and purchasing requirements that went into effect Jan. 1, only five battery-electric vehicles are eligible for the full credit, as well as one plug-in hybrid vehicle. A few more qualify for the half credit of $3,750. And that’s it.

As you can see in the table below, the following are pure EVs that are still eligible: the Chevy Bolt EV and Bolt EUV (which will soon be discontinued and replaced with updated versions); two versions of the Ford F-150 Lightning; one version each of the Tesla Model 3 and Model X; and three versions of the Tesla Model Y. And don’t forget the Chrysler Pacifica PHEV, which is also still eligible for the full honor.

(Vehicles placed in service on or after January 1, 2024 and before January 1, 2025.)

Other than that it’s a pretty bare list. The only other electric vehicles out there are the Rivian R1T and R1S, which have been reduced to half-credit status. A handful of plug-in hybrids, including the Ford Escape, Jeep Grand Cherokee 4xe and Wrangler 4xe, and Lincoln Corsair, also get half the points.

Popular EVs that were previously eligible for the honor but have now disappeared from the list include various versions of the Tesla Model 3, the Nissan Leaf and Volkswagen ID.4. Other popular models, including the Hyundai Ioniq 5, Kia EV6 and Polestar 2, were never eligible due to the fact that they are manufactured outside North America.

There was some confusion about which electric vehicles would still be eligible in the new year

There was some confusion about which EVs would still be eligible in the new year. Tesla and Ford were among the companies that told customers and dealers that some of their models would likely become ineligible by 2024. This could be tricky for car buyers, some of whom may have waited until 2024 to buy an electric car after hearing that dealers could start giving them immediate access to the tax credit from January 1.

Of course, this was all part of the gradual phase-in process of new requirements under the Inflation Reduction Act of 2022. Thanks largely to Senator Joe Manchin (D-WV), the tax credit is structured to become more restrictive as inflation is reduced. time passes. EVs with battery materials and components sourced from ‘foreign healthcare entities’ are now not eligible for the tax benefit. In 2025, additional requirements will apply to minerals used in batteries, such as lithium, cobalt, graphite and nickel.

China, North Korea and Russia are examples of countries that the U.S. says are of concern to foreign entities. And that is a problem for many electric vehicles, because large parts of the supply chain run through China.

China alone accounts for about 70 percent of the global supply of battery cells. Lawmakers have said the Inflation Reduction Act is intended to level the playing field by reducing U.S. battery dependence on China and creating American jobs in the EV sector. As a result, many automotive companies and their supply partners are now working to strengthen U.S. battery factories.

Several companies have said they will build new factories in North America, including new mining operations. But it will take years before those factories and mines are operational. And in the meantime, automakers are getting cold feet about the money they’ve invested in electric vehicle production as demand begins to cool.

Leasing remains an attractive option for car buyers who want to drive electric. Most pure electric and plug-in hybrid vehicles, regardless of the source of the battery material or where the vehicle was manufactured, are eligible for the full $7,500 tax credit if leased. This is because leased cars are considered commercially owned vehicles. The car company’s financing departments claim the credit on behalf of the customer and use the savings to lower the lease price.

Update January 2 3:26 PM ET: Updated to clarify that the base model version of the Tesla Model 3 is no longer eligible for the tax credit, and to include information about leased EVs and PHEVs.

Leave a Reply

Your email address will not be published. Required fields are marked *