US Electric Car Tax Credit Just Got Simpler But Fewer Cars Qualify

It’s 2024, and that means the electric car tax credit in the US just got a whole lot simpler . Previously, buyers had to wait until they filed their taxes before they could take advantage of the credit. Now, it is more of a rebate that gets applied right at the dealership. In effect, the dealer pays you and then gets reimbursed by the government within 72 hours [Note: we will go out on limb here and predict a significant number of new car dealers have no clue how the system works, since many of them aren’t interested in selling electric cars in the first place.] The burden will fall on shoppers to educate many dealers in order to get the full amount of the credit they are due.

There are some unknowns at this point. For instance, is it up to the dealer to verify a customer’s income? The incentive may seem like a rebate but it is still essentially a tax credit. What if someone who has no federal tax liability buys a qualifying EV? What if someone who earns too much money buys one? Do they both get the full rebate? It’s hard to imagine the dealer will be anxious to become a de facto IRS agent or hire a tax attorney to scrutinize every transaction.

Expect to hear more about this in the weeks and months to come. As of this moment, only 13 models qualify for all or part of the electric car rebate/credit if they are purchased outright. You can check whether a vehicle qualifies by entering its VIN at fueleconomy.gov . The work around here is that cars that are leased may be eligible for incentives even if the same car would not be eligible if purchased outright.

The government giveth and the government taketh away. Joe Manchin is so upset about how the Biden administration has handled implementation of the Inflation Reduction Act that he is quitting the Senate in disgust. Last year, he wrote an op ed for the Wall Street Journal in which he railed against the regulations put in place by the Treasury Department.

“Manufacturing is meant to bring manufacturing back to the United States. It’s not basically allowing everyone to put all the parts and build everything you can for that battery somewhere else and then send it here for assembly. Instead of implementing the law as intended, unelected ideologues, bureaucrats, and appointees seem determined to violate and subvert the law to advance a partisan agenda that ignores both energy and fiscal security.

The administration is attempting at every turn to implement the bill it wanted, not the bill Congress actually passed.” According to Business Insider , the cars that are eligible for the full $7500 rebate are: Chevy Bolt Chevy Bolt EUV Tesla Model 3 Performance (all other Model 3 versions do not qualify) Tesla Model Y (all versions) Tesla Model X (Long Range only) Ford F 150 Lightning Chrysler Pacifica PHEV Some versions of the Rivian R1T and R1S are eligible for half of the federal tax rebate/credit while several plug in hybrids also qualify for a $3750 benefit.

Here’s the list: Rivian R1S (dual large, dual max, and quad large versions) Rivian R1T (dual large and quad large versions) Ford Escape PHEV Jeep Grand Cherokee PHEV 4xe Jeep Wrangler PHEV 4xe Lincoln Corsair Grand Touring PHEV Bear in mind that there are still limitations on the maximum sale price of any car.

A sedan or wagon cannot have an MSRP higher than $55,000. An SUV or light truck cannot have an MSRP higher than $80,000. There are a few vehicles on the lists above that can get very close to those maximums if the buyer is not aware of the limitations. In addition, there are income limits that apply even to people who are leasing vehicles.

There have been some changes to the list of vehicles eligible for the electric car rebate since just three weeks ago . Manufacturers are scrambling to adjust where they get their battery materials and components in order to qualify for federal incentives. As of this writing, cars that use the General Motors Ultium battery system have lost their eligibility, although GM is working feverishly to correct that situation.

Until they do, the Cadillac Lyriq, Chevy Equinox EV, and Chevy Blazer EV are no longer eligible. Best to keep that fueleconomy.gov link handy because changes may happen at any time. And don’t forget to bring your accountant, tax attorney, and three character witnesses with you when you go shopping for that shiny new electric car.

You may need them to make sure the car you choose is fully qualified for the government’s largess. The upshot of all this is that while the idea of the EV rebate is to get more electric cars in the road in America, the regulations mean very few models will qualify for benefits, at least until new assembly lines and battery factories get built in America.

In other words, the EV revolution has been postponed in America until some time in 2025 at the earliest. Fortunately, the Tesla Model Y, the best selling electric car on the planet, is still eligible for the full rebate. LinkedIn WhatsApp Facebook X Email Mastodon Reddit.