Here are the models eligible for tax credits under new clean vehicle rules
Jeremy Beaman
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Only 10 of the dozens of battery electric and plug-in hybrid vehicle models on the market will be eligible for the full $7,500 consumer tax credit when new qualifications take effect for the first time on Tuesday.
The Treasury Department published the new list of eligible vehicles on Monday showing which models comply with updated assembly and battery sourcing requirements, which became more stringent under the Inflation Reduction Act. Treasury’s rules, which sparked a trade furor among U.S. allies who felt the domestic content preferences would disadvantage their own manufacturers, have been a subject of sweeping political interest and concern among interest groups over how they could affect supply and demand.
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Automakers and battery manufacturers have announced plans to move operations into the U.S. and North America to comply with the requirements and make the most of the subsidies, but the rules could put a dent in EV purchases at a time when the Biden administration wants to scale them up as quickly as possible in support of President Joe Biden’s climate change agenda.
The 10 models immediately eligible for the full credit are:
Chevrolet Bolt Chevrolet Bolt EUV Chevrolet Silverado Chevrolet Equinox SUV Cadillac Lyriq Ford F-150 Lightning Chrysler Pacifica Lincoln Aviator Grand Touring Tesla Model 3 Performance Tesla Model Y
A handful of other models, including the Ford Mustang Mach-E SUV and the Jeep Grand Cherokee plug-in, will immediately be eligible for half of the tax credit.
The Inflation Reduction Act includes language stating that for vehicles to be eligible for the full consumer clean vehicle credit, the vehicle must be assembled in North America, and its battery components and critical minerals must come in increasing shares from specific countries, including but not wholly limited to the United States.
The battery components portion requires manufacture or assembly in North America. The critical minerals portion requires extraction or processing in the U.S. or a U.S. free trade agreement country.
Implementation of these requirements comes behind schedule, something that has angered Sen. Joe Manchin (D-WV), chief architect of the law, who insisted the sourcing requirements be included as a way to ensure independence of supply from China.
Manchin also said the Treasury Department has offered too much flexibility with its new rules.
While the IRA’s new conditions cut models from Hyundai, Toyota, and other legacy automakers out of eligibility, the suite of new rules gives others access to the credit that couldn’t get it before the law was passed.
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The law removed a cap that blocked access to the credit to manufacturers that sold more than 200,000 units, opening Tesla models back up to the credit.
The list of vehicles eligible for tax credits has bounced around since the law passed as different requirements became effective at different times.