A new set of U.S. federal rules related to electric vehicle batteries took effect today (April 18) and will affect the amount of federal tax credit consumers can claim on new EV purchases.
Previously, all electric or hybrid plug-in vehicles that fell under certain retail price caps were eligible for $7,500 in federal tax rebate as long as the buyer made less than $150,000 a year ($300,000 for couples). To qualify under the new rules, automakers need to prove at least half of a vehicle’s battery components are produced in North America and 40 percent of battery raw materials are sourced from the U.S. or a country with which the U.S. has a free trade agreement, such as Canada and Mexico.
The Treasury Department yesterday issued its final list of EVs eligible for federal tax credit starting today. A total of 18 electric and hybrid plug-in vehicles are eligible for either partial or the full $7,500 tax rebate. Cars that meet just one of the battery component or raw material requirements will receive $3,750 in tax refund. Only those satisfying both requirements qualify the full amount.
Here are the vehicles eligible for $7,500 in federal tax credit:
- Cadillac Lyriq
- Chevrolet Blazer
- Chevrolet Bolt
- Chevrolet Bolt andEUV
- Chevrolet Equinox
- Chevrolet Silverado
- Chrysler Pacifica PHEV
- Ford (F) F-150 Lightning
- Lincoln Aviator Grand Touring
- Tesla (TSLA) Model 3 Performance
- Tesla Model Y (all versions)
Here are the vehicles eligible for $3,750 in federal tax credit:
- Ford Escape Plug-in Hybrid
- Ford E-Transit
- Ford Mustang Mach-E
- Jeep Grand Cherokee PHEV 4xe
- Jeep Wrangler PHEV 4xe
- Lincoln Corsair Grand Touring
- Tesla Model 3 Standard Range Rear Wheel Drive
Popular vehicles like the Nissan Leaf and Volkswagen ID.4 crossover will no longer receive any EV tax credit.
These battery-sourcing requirements are scheduled to tighten over the next few years. Unless carmakers modify their battery supply chains, fewer cars will be eligible for federal tax credit. Under the Inflation Reduction Act, the minimum percentages required will increase each year through 2028 until reaching 80 percent for battery raw materials and 100 percent for components.
