The Electric Vehicles Eligible for the $7,500 Tax Credit in 2024
The federal government is offering a $7,500 discount on the purchase price of new electric cars in the current year, with only six models qualifying for the tax credit.
The Chevrolet Bolt, Ford F-150 Lightning, and select Tesla Model 3, X and Y models are all fully electric cars that are eligible for the highest possible incentive.
Latest information from The Internal Revenue Service (IRS) also indicates that the Chrysler Pacifica plug-in hybrid still qualifies for the entire tax credit.
A total of 19 vehicles are eligible for either a $7,500 or $3,750 discount, with 13 of them receiving partial credit. See the complete list below.
The IRS, enforced by the Biden administration, is making changes to the EV battery supply chain in the US by denying full credit to vehicles with batteries partly manufactured in China.
The new regulations have an effect on General Motors, particularly in terms of the Government credits they receive on all but one car. Nonetheless, they declared this week that they will be providing their own discounts for other electric vehicles.
Electric vehicles such as the Chevrolet Bolt, the Ford F-150 Lightning, and certain versions of Tesla’s Model 3, Model X, and Model Y are eligible for consideration.
To be eligible, motor vehicles must be put together in the Americas and not contain any battery components which were made by ‘unfavorable foreign entities’ – including those located in China.
For vehicles that still qualify, $3,750 in credit can be obtained; this is half of the total amount. The majority of the battery components need to have been put together in North America and the materials need to have originated from the United States or a partner country.
At least 60% of the components used to make batteries must be either produced or put together in North America, and at least 50% of the critical minerals must have been extracted or treated in either the United States or a nation with which it has a free-trade agreement.
North American recycling of minerals must have been tapped into as an alternative.
Partial credits are available for certain electric vehicles sold by Ford, Jeep, Lincoln, and Rivian.
This year, the Tesla Cybertruck, certain models of the Model 3, the Nissan Leaf, the Ford E-Transit, the electric Chevrolet Blazer, and the Silverado have all been disqualified from eligibility.
Starting on January 1, 2024 and running through January 1, 2025, all models put into service will be subject to the alterations.
Leading up to the new year, it wasn’t completely clear which vehicles would be eligible, until Tesla updated their website near the end of December to show that some Model 3 cars wouldn’t be turned away based on their “current view of new IRA guidance”.
The specific qualification for the program is based on the Manufacturer’s Suggested Retail Price (MSRP) of the vehicle, where it was assembled, the battery components or minerals used in its production, as well as the buyer’s income.
The Ford F-150 Lightning is still eligible to receive the full credit, however, Ford has announced that the cost of the least expensive models will be raised from $5,000 to $10,000.
The Ford F-150 Lightning can still get the full credit, however the company stated they will be raising the price on the least expensive models by five to ten thousand dollars.
During September 2022, the Cadillac Lyriq was displayed at the North American International Auto Show in Detroit, Michigan; however, GM has since stated that the car had become ineligible due to some minor components.
GM reported that the Cadillac Lyriq was disqualified due to a few insignificant pieces. It was showcased at the North American International Auto Show in Detroit, Michigan, in September of 2022.
Wednesday was when GM declared they would be providing incentives on vehicles that had not qualified for the federal tax credits.
In an announcement to dealers, General Motors stated that it would be awarding a $7,500 rebate for any electric vehicles that become ineligible for the federal tax credit after January 1, 2024, per InsideEVs.
GM remarked in the past month that all their electric vehicles, besides the Chevrolet Bolt, had been disqualified for the incentive and they suggested the Cadillac Lyriq and Chevrolet Blazer’s exclusion was due to minor elements.
The Ford F-150 Lightning is still able to get the full credit, however Ford will raise the cost of its least expensive models by $5,000 to $10,000, while decreasing the prices of some of its more luxurious models by up to $7,000.
At the start of last month, Ford reported that it would cut the production of its all-electric F-150 by half due to reduced interest in EVs.
It has been reported that the Michigan facility of the company has initiated the manufacture of 1,600 units per week, which is half of the maximum capacity of 3,200, beginning this month.
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