New Rules for EVs: Only 13 Models Eligible for U.S. for $7,500 Tax Credit

With the surge in EV demand seemingly reaching a peak, incentives for purchasing electric vehicles are beginning to dwindle. Currently, only 13 EV models qualify for a consumer tax credit of up to $7,500 due to new rules instated by the Biden administration on January 1, reports Bloomberg. The prior count was close to 24 eligible models, but tax credits for the new year exclude vehicles that utilize battery components produced by Chinese companies.

“Automakers are revamping their supply chains to ensure customers continue to qualify for the new clean vehicle credit, collaborating with partners and repatriating jobs and investments to the United States,” Treasury Department spokesperson Ashley Schapitl explained. Schapitl also mentioned that several firms are still in the process of submitting data to verify their eligibility for the credit.

The Treasury Department introduced regulations last month aimed at battery components produced by firms under Chinese jurisdiction or those owned at least 25% by the Chinese government. Starting in 2025, these rules will also apply to suppliers of vital battery materials such as nickel and lithium, as part of President Joe Biden's climate law, informed by Senator Joe Manchin. Manchin, crucial in approving the Inflation Reduction Act, sought to address concerns about US taxpayer money subsidizing Chinese-made batteries.

As per Bloomberg, vehicles' eligibility for a $7,500 or $3,750 credit depends on the manufacturing location of battery parts and components.

Models that qualify for the full or partial credit encompass Tesla's Model Y, Rivian’s R1T, Stellantis's Jeep Wrangler 4xe, and Ford's F 150 Lightning. Nevertheless, credit access was revoked for Tesla's Cybertruck, specific Model 3 variants, Nissan’s Leaf, Ford’s E Transit van, and GM’s electric Blazer and Silverado.