09/29/2022 – New US EV Tax Credit

09/29/2022 – New US EV Tax Credit: Contents

New US EV Tax Credit

The Inflation Reduction Act contains a number of measures designed to turbocharge the adoption of electric vehicles and renewable energy. The provisions that have been getting most of the press are the changes to the federal EV tax credit program—which is only natural, as that’s the part of the law that directly affects prospective EV buyers.

The main objective of the tax credit is to boost EV adoption from the demand side by making EVs more affordable—however, the new rules are also intended to pressure EV-makers to reduce their prices, and to produce more of their components in the USA.

What is now called the Clean Vehicle Credit offers a tax credit of up to $7,500 to buyers of new plug-in or fuel cell vehicles. In order to receive any credit, vehicles must meet three sets of overall eligibility requirements: vehicle MSRP caps; buyer income caps; and the final assembly provision. The latter requires that the vehicle be assembled in North America.

The $7,500 Clean Vehicle Credit is split into two equal parts, which have different eligibility requirements.

Vehicles that meet the Critical Minerals provision are eligible for half of the $7,500 credit. This requires that a certain minimum percentage  of critical minerals must be extracted or processed in the US or a free trade partner country, or recycled in North America.

Vehicles that meet the Battery Components provision are eligible for the other half of the $7,500 credit. This requires that a certain minimum percentage of battery components must be manufactured or assembled in North America.

 

Click here to read the article: New US EV Tax Credit: Here’s Everything You Need To Know (msn.com)

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