By Lauren Fix
The Treasury Department has revealed which cars will be eligible for the new electric vehicle tax credits. Fewer models are now eligible for the new subsidy than in previous years, but some of the most well-known EVs still qualify, according to the Monday announcement.
Under the new rule, consumers can get up to $7,500 in tax credits on eligible cars. There is no limit to the number of EVs automakers can sell with tax credits, as long as those vehicles meet the requirements. This is a change from the previous rule, which capped the number of vehicles that could be sold with the tax incentives. Sixteen new models and some of their variations are eligible for all or half of the new credit, while nine models, mostly foreign made vehicles, are no longer eligible.
Most of the eligible cars are made by the “big three” EV automakers in the US — Ford, General Motors, and Stellantis — plus Tesla. 20 cars are eligible as of today. Here are the vehicles on the current list which includes most Ford, Lincoln, Chevy, Jeep, and Tesla EVs and some hybrids.
2022-2023 Chrysler Pacifica PHEV
2022-2023 Jeep Wrangler PHEV 4xe
2022-2023 Jeep Grand Cherokee PHEV 4xe
2022-2023 Ford F-150 Lightning (standard and extended range)
2022 Ford e-Transit
2022-2023 Ford Mustang Mach-E (standard and extended range)
2022 Ford Escape Plug-in Hybrid
2022 Lincoln Corsair Grand Touring
2023 Lincoln Aviator Grand Touring
2022-2023 Chevrolet Bolt
2022-2023 Chevrolet Bolt EUV
2023-2024 Cadillac LYRIQ
2024 Chevrolet Silverado
2024 Chevrolet Blazer
2024 Chevrolet Equinox
2022-2023 Tesla Model 3 Standard Range RWD
2022-2023 Tesla Model 3 Performance
2022-2023 Tesla Model Y AWD
2022-2023 Tesla Model Y Long Range AWD
2022 Tesla Model Y Performance
What about the other EVs that don’t qualify for the new tax credit.? There are nine models, mostly from Hyundai, KIA, Toyota and Nissan, that do not qualify for the new tax credit. However, that could change in the coming months and years as some of these brands are building factories in the US to assemble their vehicles and their batteries.
It’s important to note that there is a separate tax credit that applies to used EVs, and it doesn’t carry such stringent requirements on battery content or manufacturing. Used EVs qualify for less of an overall tax credit and also come with certain income requirements. Similarly, leased vehicles can also qualify for a $7,500 tax credit without some of the strict rules about the car’s batteries and final assembly, meaning consumers who want more choice on which model to drive could settle on leasing instead of buying outright. The list of eligible new and used EVs will be updated at www.fueleconomy.gov.
The new Treasury rule on EVs comes from the Inflation Reduction Act, the climate and clean energy law passed by Congress last year. The rules were written in a way help move the supply chain for the critical minerals needed for things like EV batteries, solar panels and smaller rechargeable batteries away from China.
There are two major requirements that auto makers need to meet if they want their EVs to be eligible for the $7,500 tax credit: a critical mineral requirement and a battery component requirement, which are each worth $3,750.
The critical mineral required mandates a certain percentage of the critical minerals that power EV batteries; such as cobalt, lithium, nickel, graphite and copper; must be extracted or processed in the United States, or a country that it has a free-trade agreement with which does not include China. China currently owns over 80% of these mines globally.
The minerals can be recycled in North America, Redwood Materials is working on that with some success. The tax credits are also based on the required mandates that a certain percentage of the battery components must be manufactured or assembled in North America.
Importantly, these requirements will ramp up over several years. For critical minerals, the percentage will start at 40% in 2023 and ramps up each year to 80% by 2027. For battery components, the percentage will start at 50% and ramp up each year to 90% by 2028. This will limit the vehicles that will be eligible.
Administration officials and experts agree the rules are incredibly complicated to implement in a very short timeframe.
Over the last few months car manufacturers have seen a wave of announcements from car companies that are moving their EV and battery production factories to the US and neighboring countries. This is good as it will lead to more jobs.
What is important to note is that even officials say to move the supply of critical battery minerals to North America is an issue. This includes mining and refining which will be the most difficult aspect to change. China has a tight grip on the current supply chain of auto component and battery materials. The US has just a few lithium mines, located in Nevada. Companies are vying to start mining lithium around California’s Salton Sea, though no commercial operations have started yet. The reason we don’t mine cobalt and other minerals in the USA is due to environmental issues.
Some car manufacturers are getting the $7500 credit and passing it along to their customers, this can only happen with a lease and not purchase. Please do your research on the government website and with the brand before you decide to buy an electric car.
Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.
Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak.
Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum and Juror / President for the North American Car, Utility & Truck of the Year Awards.
Check her out on Twitter and Instagram @LaurenFix.
