With the stroke of a pen on Tuesday, President Biden made a long list of vehicles ineligible for the federal electric car tax credit.
The new rules included within the Inflation Reduction Act immediately eliminate any fully electric or plug-in hybrid vehicle built outside of North America from qualifying.
The Hyundai Ioniq 5, Kia EV6 and Toyota Rav4 Prime are among the models from mass-market brands that are no longer eligible for the tax credit, based on their manufacturing locations.
Additional sale price and income caps go into effect on January 1, 2023, as do restrictions on where the source materials for the batteries come from.
THE INFLATION REDUCTION ACT IS CHANGING ELECTRIC CAR TAX CREDITS
According to the Alliance for Automotive Innovation, the trade group that represents most of the automakers who sell vehicles in the United States, it is possible that no vehicles will be ready to meet the battery rules by the end of the year.
THIS IS THE MOST UNAPPEALING THING ABOUT NEW CARS RIGHT NOW
Vehicles from General Motors and Tesla, which both exhausted their credits under the previous program that phased them out after 200,000 units were sold, will not become eligible again under the new rules until 2023.
One caveat to all of this is that anyone who had entered a binding purchase contract prior to the passage of the law can still claim the credit under the old rules, regardless of when the vehicle is finally delivered.
Below is a list of the only vehicles that are currently on sale that qualify, according to the Energy Department, which cautions that some models are made in multiple locations and that only the North American-manufactured examples are eligible:
2022 Audi Q5 plug-in hybrid
2022 BMW 3-series plug-in hybrid
2022 BMW X5 plug-in hybrid
2022 Chrysler Pacifica Hybrid
2022 Ford Escape Plug-in Hybrid
2022 Ford E-Transit
2022 Jeep Grand Cherokee 4xe
2022 Jeep Wrangler 4xe
2022 Lincoln Aviator Grand Touring
2022 Lincoln Corsair Grand Touring
2022 Lucid Air
2022 Nissan Leaf
2022 Rivian EDV
2022 Rivian R1S
2022 Volvo S60 Recharge
2023 BMW 3-series plug-in hybrid
2023 Mercedes EQS SUV
2023 Nissan Leaf
Volkswagen has also started producing the ID.4 at its Chattanooga, Tennessee, factory and qualifying vehicles are expected to begin deliveries before the end of 2022.
