Surprise: Only 13 EVs Qualify For Tax Credit

Well, this will certainly help force citizens into buying cars they cannot afford that do not give them the range they need and are problematic for them to charge

For consumers shopping for an EV, new rules mean fewer models qualify for a tax credit

U.S. consumers looking to get a tax credit on an electric vehicle purchase have fewer models to choose from under new rules that limit the countries where automakers can buy battery parts and minerals — a potential blow to efforts to reduce planet-warming emissions from autos.

The Inflation Reduction Act signed into law in 2022 expanded tax credits ranging from $3,750 to $7,500 for purchases of new and used EVs, an effort by the Biden administration to stoke demand toward its goal that half of all new vehicle sales be electric by 2030. But qualifying for the credits depends on requirements related to their battery makeup and minerals that get tougher each year.

As of Jan. 1, new rules favor U.S. domestic materials and manufacture. The rules largely target battery components from nations “of concern” — mostly China, but also Russia, North Korea and Iran.

China dominates crucial parts of EV battery supply and production, even as automakers race to establish key mineral and components efforts elsewhere. As a result, only 13 of the more than 50 EVs on sale in the U.S. are eligible for the credits so far this year, down from about two dozen models that qualified in 2023.

Thirteen.

The Tesla Model Y SUV, Chevrolet Bolt compact car and Rivian R1T pickup truck all still qualify. But even different trim levels and variants of the same model now qualify differently; certain Teslas are no longer eligible.

Neither are the Chevrolet Blazer SUV and the Cadillac Lyriq, from General Motors; the Ford Mustang Mach-E; or the Nissan Leaf.

And it will take a while for manufacturers to comply. But, what the AP doesn’t mention is how hard it is to get those materials from acceptable nations, especially the U.S., where enviro-weenies will sue to block any mining.

One positive development for EV buyers this year is that qualifying vehicles can have the credits applied at the time of purchase, as long as the dealer fronts the cost. That means buyers can more easily afford the purchase. More than 8,700 U.S. dealers have signed up to do so, the Treasury Department said last week.

General Motors is also taking $7,500 off its models that lost eligibility, and other deals are available across the market — even as automakers continue to lose money on EVs.

How many dealers are willing to take the upfront hit, and simply wait on the federal government to reimburse them? Mind you, dealers are not owned by the manufacturer. They may have signed up, but, will they follow through? And, if GM can just take $7,500 off before a consumer even comes in, how much profit is built into the vehicle? Or, are they just taking even more of a lost? Seriously, if Americans really wanted EVs at this time no tax credit would even be needed. No coercion.

BTW, the tax credits are very complicated: if a dealer takes the hit, does this affect the tax filings of the purchaser?

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