EVs Eligible for $7,500 EV Tax Credit in Inflation Reduction Act
This article was originally published here: https://www.automotive-fleet.com/10179313/evs-eligible-for-7-500-ev-tax-credit-in-inflation-reduction-act.
The Inflation Reduction Act of 2022, the major climate bill, went into effect on Aug. 16, adding a new requirement for final assembly in North America. As of now, only EVs assembled in North America qualify for the electric vehicle tax credits.
In the new climate bill, there are several additional provisions that will affect the availability of EV credits; they will go into effect over the coming months and years.
The Department of Energy has provided a list of model year 2022 and early model year 2023 electric vehicles that could meet the final assembly requirements. For some vehicle manufacturers, the build location may vary based on the specific vehicle, trim, or the date in the model year when it was produced; some vehicle models are produced in multiple locations.
To identify the manufacturer location for a specific vehicle, search the vehicle identification number (VIN) of the vehicle on the VIN Decoder website for the National Highway Traffic Safety Administration (NHTSA).
According to the IRS, the total amount of the credit allowed for a vehicle is limited to $7,500. For vehicles acquired after Dec. 31, 2009, the credit is equal to $2,500 plus $417 (for a vehicle that draws propulsion energy from a battery with at least 5 kilowatt hours of capacity). An additional $417 is added for each kilowatt hour of battery capacity beyond 5 kilowatt hours.
Some car manufacturers have already reached a cap of 200,000 EV credits used. That cap is lifted on Jan. 1, 2023, so cars identified as “manufacturer sales cap met” won’t qualify for the electric car tax credit until 2023.
The Department of Energy’s list will most likely change with the EV tax credit’s upcoming provisions or as manufacturers change their production plans.
Originally posted on Fleet Forward