Washington, DC (CNN Business)The newly signed Inflation Reduction Act has Buyers AffectingSome popular electric vehicles may be eligible for the tax credit again, while others that were covered this month will be waived for the foreseeable future. Here's what you should know as a consumer.
The old deduction offered new electric vehicle buyers $7,500 until he reached the limit of tax credits available to the automaker, which is $200,000. Buyers of plug-in hybrids received less credit.
The new law imposes new limits not only on the buyer's income, but also on the price of the vehicle.
How can I get a tax credit?
There are many stringent requirements for electric vehicles to qualify for the tax credit under the new law, which will take full effect on January 1, 2023. Vehicle must be assembled in North America. Much of their battery component and battery mineral production must be in North America. Starting in 2023, 40% of the critical minerals used to make car batteries must be extracted or processed in the United States or countries that have free trade agreements with the United States. By 2027, that number will rise to 80% of battery minerals. Battery component requirements require 50% to be manufactured or assembled in North America from 2023 and 60% in 2024 and 2025. This number will gradually increase to 100% in 2029.
Under the new credit system, the suggested retail price of a pickup or SUV cannot exceed $80,000 and other vehicles such as sedans cannot exceed $55,000. Purchaser's income must not exceed $150,000 for him if single, $225,000 for him if head of household, and $300,000 for him if married.
A buyer who purchases a used electric vehicle or plugs in his hybrid vehicle for the first time he can receive $4,000.
You must also purchase the vehicle by December 31, 2032.
The amount of the tax credit.
New vehicles can be purchased for up to $7,500 if final assembly is done in North America. Half of the credit ($3,750) depends on meeting the battery mineral requirements, and the other half depends on the battery component requirements.
New credits apply to buyers who purchase used electric vehicles for up to $4,000. Credits cannot exceed 30% of the vehicle's selling price.
Which cars are eligible for the $7,500 tax credit?
Ford, GM, Hyundai, Toyota and Volkswagen. The new tax credit will significantly reduce the number of eligible vehicles. According to industry groups, 70% of all electric, hybrid and fuel cell vehicles that can be purchased in the United States today are not covered by any credit, even partial ones.
Popular electric vehicles such as Hyundai's Ionic 5 and Kia's EV6 will no longer qualify under the new rules unless manufacturers change things like where the vehicles are assembled.
Tesla, which includes the popular Model 3 and Y, has been ineligible for credit in past structures since the company hit his 200,000 vehicle limit per automaker in January 2020. . However, that restriction will be lifted on January 1, 2023, and Tesla will again be eligible for the tax credit if it meets all other new requirements.
Are there any exceptions?
Some electric and plug-in hybrid vehicles will remain covered until the end of the year due to changes in the bill. When Biden signed the bill, the North American Congressional Statute went into effect, but nothing else. Consumers interested in North American-made electric vehicles are encouraged to consider purchasing before he January 1, when stricter requirements begin.
The automaker expects the Mercedes-Benz EQS SUV to be eligible by the end of the year, but that won't be the case because the EQS sedan, unlike the SUV, isn't assembled in the US.BMW says that both the X5 Plug-in Hybrid and 3 Series Plug-in Hybrid will be covered for the remainder of 2022. -150 Lightning and Escape plug-in hybrids will be eligible for the rest of the year.
These vehicles should be delivered by the end of the year.
Rivian's vehicles are built in North America, but new orders placed in the last month of the year are not credible because the automaker has an order backlog that exceeds annual production targets. Not likely.
As the government finalizes tax credits, automakers and consumers are in the dark as he looks to 2023. For example, it is unclear how governments determine whether a vehicle meets thresholds for battery minerals and battery components. Ultimately, the IRS will provide the consumer with a list of vehicles that indicate the amount the consumer is entitled to receive.
The purchaser of the new Nissan LEAF is an automaker. up to the tax deduction. Said.
Why are there so many limits?
Senator Joe Manchin, who had an important vote, expressed concern about the US' dependence on foreign countries for parts for electric vehicles. Noting that the US makes its own gasoline cars and engines, Manchin suggested the country could do the same with electric cars and batteries. and processing, as well as vehicle assembly, to North America. Some experts have warned of the national security risks associated with relying on foreign countries for electric vehicles.
How long does it take to get the tax credit if I find a qualifying vehicle?
Initially, the buyer waits to receive the tax credit at tax filing. is needed. However, starting January 1, 2024, electric vehicle buyers will receive their money immediately at the point of sale if they agree to transfer credit to their dealer.