The Biden administration, pushing for more American manufacturing, has released an updated list of all electric and gas-electric hybrid vehicles that qualify for the full $7,500 tax credit.
With the update, 16 models are now eligible for a full or partial tax credit, based on new limits that require a certain percentage of battery components and minerals used in those batteries to come from North America, meaning the United States or a country with selective trade agreements with the United States.
The total is down from the 25 electric and plug-in models that previously qualified for the U.S. tax credit, which was first introduced 10 years ago.
The amendment limits the selection to vehicles built by four car companies: Tesla Inc.
Ford Motor Company
General Motors Co.
and Stellandis NV
Owned by Jeep and Chrysler.
See Full list.
The government site also advises on tax incentives for used and leased vehicles.
For buyers to receive the full $7,500 tax credit, a predetermined percentage of battery components must contain a percentage of critical minerals sourced in North America and in the United States or certain trade friendly countries. A partial $3,750 credit is available to meet either of these two battery proof requirements.
Even an electric model of a foreign brand is not eligible for revised subsidy. and EVs from startups such as passenger- and commercial-truck maker Rivian Automotive Inc.
and luxury brand Lucid Group Inc.
Failed to create list. It’s because their vehicles are too expensive for price contingencies to dictate which autos qualify. The income level of the buyers is also considered.
However, the new rules create some more immediate winners than others.
Almost all of GM’s new EV models are eligible for the full $7,500 tax credit. Six Ford electric and plug-in hybrid models qualify for a partial or full tax credit, including the Mustang Mach-E and F-150 Lightning.
Among Tesla’s models, a $3,750 credit is available on certain entry-level Model 3 sedans. Because this car uses battery cells made in China. High-end Model 3s and all Model Y configurations qualify for the full $7,500 credit.
Tesla has been slashing its retail prices in a move to boost sales and bring in some incentives to match tax incentives. Also, analysts say that producers have not cut prices.
Tax credits made a big difference when they were added The Inflation Reduction Act of 2022, the sweeping spending bill, which observers called the largest pro-climate measure by an administration to date. But Biden’s pro-American stance is at odds with the heart of the soon-to-be EV market, much of which comes from overseas.
According to: With pledges from Uber, Walmart, PG&E and more, Biden is adding more EV charging across America
The latest changes to entice automakers to build locally will apply to vehicles delivered to customers from Tuesday. Several foreign manufacturers, including Hyundai and Honda, have begun building battery plants in the United States
Other actions are intended to push EVs as well. The Environmental Protection Agency last week proposed its stricter restrictions on tailpipe emissions, a goal that can only be achieved by moving more EVs off assembly lines. The new standards require that two-thirds of U.S. car sales be electric by 2032.