After 8/16 What Vehicles Qualify for US $7,500 Inflation Reduction Act Rebates?–US Assembly Required

How electric vehicles will qualify for the new federal tax credits from the Inflation Reduction Act are now being posted by the Internal Revenue Service and the EPA websites.

After August 16—only vehicles with final assembly in the US qualify for rebates. More restrictions will go into affect over time including how the batteries are sourced.

Here are the first specs provided by the feds that are not necessarily final.

What Vehicles Do Not Qualify?

So far the Porsche Taycan, Kia Niro and Audi e-Tron will not qualify for the new rebates. We also suspect that the Fisker Ocean (Made in Europe), many models from Hyundai, Toyota, Honda, Mazda, MINI and Volkswagen (before they are being assembled in the US) will not qualify.

Used electric vehicle costing less than $25,000 may qualify for a $4,000 credit up or 30% of the price or rebate starting in 2023–for only those who individuals who make under $75,000 or couples who make under $150,000.

Credits at point of sale will not go into effect until 2024.

Consumers that purchase a qualifying electric vehicle can continue to claim the electric vehicle tax credit on their annual tax filing. Starting in 2024, the Inflation Reduction Act will allow car buyers to transfer the credit to dealers at the point of sale so that reduces the purchase price.”

Important Information About Tax Credits:

The Inflation Reduction Act of 2022— changes credit amounts and requirements for clean energy vehicles.

Enacted August 16, 2022
The Inflation Reduction Act of 2022 (Public Law 117-169) amends the Qualified Plug-in Electric Drive Motor Vehicle Credit (IRC 30D), now known as the Clean Vehicle Credit, and adds a new requirement for final assembly in North America that takes effect on August 16, 2022. Additional provisions will go into effect on January 1, 2023.

Here’s what the IRS states:

Transition Rule for Vehicles Purchased before August 16, 2022

If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), you may claim the EV credit based on the rules that were in effect before August 16, 2022. The final assembly requirement does not apply before August 16, 2022.

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022

If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold).

What Is a Written Binding Contract?

In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit). While the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law, if a customer has made a significant non-refundable deposit or down payment, it is an indication of a binding contract. For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions.

Future Guidance

To reduce carbon emissions and invest in the energy security of the United States, the Inflation Reduction Act of 2022 significantly changes the eligibility rules for tax credits available for clean vehicles beginning in 2023. The Internal Revenue Service and the Department of the Treasury will post information and request comments from the public on various existing and new tax credit incentives in the coming weeks and months. Please look for updates on and other announcements from the Administration.

The Department of Energy has provided a list of Model Year 2022 and early Model Year 2023 electric vehicles that may meet the final assembly requirement. Because some models are built in multiple locations, there may be vehicles on the list that do not meet the final assembly requirement in all circumstances.

To identify the manufacture location for a specific vehicle, please search the vehicle identification number (VIN) of the vehicle on the VIN Decoder website for the National Highway Traffic Safety Administration (NHTSA). The website, including instructions, can be found at VIN Decoder.

NOTE: Some manufacturers that have vehicles assembled in North America have reached a cap of 200,000 EV credits used and are therefore not currently eligible for the Clean Vehicle Credit.

From AUTO Connected Car News: Please note the vehicles must cost less than $55,000 and $80,000 for trucks and SUVs only will qualify starting in 2023.

The base model Tesla Model 3 the only model under $55,000 if the Model Y is classified as SUV it may qualify.

Eligible individuals can make $150,000 annually or less, while married couples filing jointly can make up to $300,000 a year.

By 2024, half of the battery’s component value has to come from North America for tax credit eligibility which increased to 100% after 2028.

As vehicle manufacturers continue to submit the applicable vehicle identification information to the relevant government agencies, this list will be updated as more information becomes available.

The Lucid Air although it is made in Arizona–costs more than the $55,000 price cap-and will not likely be eligible for the credit.

Manufacturers that have reached the 200,000 electric vehicle credits cap will not qualify until Jan. 1, 2023.

Electric Vehicles Assembled in North America
Model Year Vehicle Note
2022 Audi Q5 Check prices higher end models may go over the price caps.
2022 BMW 330e “”
2022 BMW X5 “”
2022 Chevrolet Bolt EUV Manufacturer sales cap met
2022 Chevrolet Bolt EV Manufacturer sales cap met
2022 Chrysler Pacifica PHEV Check prices higher end models may go over the price caps.
2022 Ford Escape PHEV “”
2022 Ford F Series “”
2022 Ford Mustang MACH E “”
2022 Ford Transit Van “”
2022 GMC Hummer Pickup Manufacturer sales cap met
2022 GMC Hummer SUV Manufacturer sales cap met
2022 Jeep Grand Cherokee PHEV Check prices higher end models may go over the price caps.
2022 Jeep Wrangler PHEV “”
2022 Lincoln Aviator PHEV “”
2022 Lincoln Corsair Plug-in “”
2022 Lucid Air Price is over $55,000
2022 Nissan Leaf All models are below the price cap.
2022 Rivian EDV Check prices higher end models may go over the price caps.
2022 Rivian R1S Some models may cost above the price cap.
2022 Rivian R1T With prices starting at $78,000 some models will cost above the price cap.
2022 Tesla Model 3 Manufacturer sales cap met
2022 Tesla Model S Manufacturer sales cap met
2022 Tesla Model X Manufacturer sales cap met
2022 Tesla Model Y Manufacturer sales cap met
2022 Volvo S60 T8 extended range models may be above price cap.
2023 BMW 330e
2023 Bolt EV Manufacturer sales cap met
2023 Cadillac Lyriq Manufacturer sales cap met- 2023 Orders are full-If classified as an SUV 2024 MSRP starts at $62,990 for RWD prices some models may go over price cap. Cadillac is taking preorders now for delivery in Spring 2023.
2023 Mercedes EQS SUV With an expected MSRP starting at $110,000 this model is probably not eligible for incentives.
2023 Nissan Leaf

AUTO Connected Car News–comment– always check prices higher end models may go over the price caps. Also is dealers add-on fees for additional features the prices may not meet price requirements.

Any other observations? Please put in the comments below: