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Vehicles purchased after the law was enacted will need to comply with the new North American assembly requirements. This will matter to folks who have signed up to buy an EV but are waiting for it to be delivered. The fine print: If you had put money down on a new EV before Tuesday, when Biden signed the Inflation Reduction Act, you still qualify for the preexisting tax credits. The bill also includes a used electric vehicle tax credit of $4,000 or 30 percent of the vehicle’s value, depending on which is lower. manufacturing, and battery chemistries are evolving, which could make it easier to comply with the mineral requirements over time. Companies such as Hyundai are investing in U.S. But that facility isn’t expected to be completed until 2024.Ĭantor said he was optimistic that automakers will tool up to meet the law’s requirements. Hyundai is building a new electric vehicle factory in Georgia, which would make it eligible for the partial credit. Who’s going to be disappointed? Consumers interested in buying a Hyundai Ioniq, which has emerged as a particularly popular EV model in recent years. Think Tesla, GM, Ford - all of which have battery manufacturing in the United States or North America. In the near term, consumers can reasonably expect to receive partial credit ($3,750) for domestically made vehicles. “It is going to be bumpy for consumers in the short term as they implement this,” Cantor said, noting that consumers should expect varying credit values based on a vehicle’s make and model. The second provision requires a percentage of the minerals that go into that battery to be mined domestically or in countries with a free-trade agreement with the U.S. The first requires a portion of the battery parts to be made in North America. Most importantly, the car will need to satisfy two manufacturing requirements to be eligible for the credit.

The law caps the value of new sedans eligible for the credit at $55,000 and trucks and SUVs at $80,000. And if you’re eyeing a sleek Lucid Air, with a base price of $87,400, you’re out of luck. Individuals making more than $150,000 a year or couples making more than $300,000 annually don’t qualify. The buyer will need to satisfy income eligibility requirements. The vehicle needs to be assembled in North America. The new tax credit comes with strings attached. So time to head to the local dealership and buy a new EV, right? Well, it’s not so simple. “The big picture is you are going to have an EV tax credit that is around longer than the status quo,” said Corey Cantor, an EV analyst at Bloomberg New Energy Finance. Instead of claiming the credit on their taxes as they would have needed to do in the past, car buyers will be able to directly apply it to the purchase price of the vehicle starting in 2024. Other companies, such as Ford and Nissan, were on track to hit the cap in the next couple of years. Neither automaker had been eligible for the federal tax credits after hitting a quota under the government’s preexisting subsidy program. That’s particularly good news for someone looking to buy a vehicle from Tesla or General Motors, which makes the Chevrolet Bolt.

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At full value, the credit is worth $7,500. The Inflation Reduction Act expands the tax credits available to electric vehicle buyers. If you were in the market for an electric vehicle, it’s your lucky day. A group of Tesla cars line up at charging stations at a dealership in Littleton, Colo., Aug.