September 26, 2022

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What do EV tax credits on an IRA invoice mean to you

What do EV tax credits on an IRA invoice mean to you

In the short term, it’s possible that changes to the electric vehicle tax credit will “eliminate a lot of vehicles from being eligible,” Harteau said.

For example, he noted, cars not assembled in North America are expected to become disqualified immediately. Nowadays, these vehicles can include those from Hyundai, Kia and Toyota, among others, According to Consumer Reports.

Other models of cars, no matter where they are assembled, will not qualify because they are too expensive. To be eligible for a credit, new electric vehicles that are vans, SUVs, or pickup trucks can’t exceed $80,000, while other types of vehicles can cost no more than $55,000. Used electric vehicles can qualify if they cost no more than $25,000. Car List Compiled by Consumer Reports Which probably wouldn’t qualify because of their price tags include some Teslas cars, many BMWs and other models depending on the vehicle modifications.

In the long run, however, the new electric car incentives “are likely to be a massive improvement over the current tax credit system,” Harteau said. “It will really help middle-class Americans afford electric cars. They may just have to wait a few more years” until automakers can adapt to new requirements and increase the supply of vehicles.

And while new manufacturing requirements could be a “high standard for clarity,” the current car cover may already be making it difficult for many people to purchase popular electric vehicles that will qualify for a tax credit, Leah Stokes, Associate Professor of Environmental Policy at the University of California, Santa Barbara. “There is no current tax credit for essentially electric vehicles for most electric vehicles that Americans buy,” Stokes said, noting that many popular auto manufacturers have hit the sales limit.

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What’s more, one aspect of the electric vehicle market will likely remain unchanged, regardless of applicable tax law, Foley said.

“At the moment, this is because of the restrictions placed on individual companies,” he said. “In the future, it may be someone who has batteries that meet the criteria.”