Yahoo Autos We Name the EV Tax Credit Winners and Losers
UPDATE, 4/19/2023: The Department of Energy has released full information on the tax incentives and what vehicles are eligible (or not). See the full list here. Volkswagen has confirmed that its U.S.-built ID.4 qualifies for the full $7500 federal incentive.
Last August, President Biden signed the Inflation Reduction Act. Among its hundreds of pages were measures to restructure the federal tax incentive for buying a plug-in vehicle and boost U.S. production of EVs and their batteries. Much confusion ensued.
Final guidance was issued by the U.S. Treasury on March 31, meaning next Tuesday, April 18, is the day everything changes. That day, only battery-electric and plug-in-hybrid vehicles assembled in North America (U.S., Canada, or Mexico), with MSRPs less than $55,000 for cars and $80,000 for SUVs and light trucks, will qualify for purchase incentives up to $7500. Equally challenging, the sources of certain percentages of their battery minerals and components are restricted to a specific list of countries—one that notably does not include China, by far the world's largest source of those components today.
Regrettably, the EPA says it will not revise its list of eligible EVs until April 17—the day before the new rules come into effect. And note that commercial-fleet customers that lease their EVs can qualify for the full incentives regardless of the factors above.
In a statement, Alliance for Automotive Innovation CEO John Bozzella told Reuters the requirement that EVs must be assembled in North America to qualify for any credit eliminated 70 percent of EV models on sale today.
Car and Driver reached out to automakers to ask whether their batteries and minerals were compliant with the new regulations as well. The short answer? It's complicated.
Looking at the EVs on the market for 2023, winners and losers in the incentives game start to emerge based on where they're built. Here is our non-comprehensive list of where we stand for retail buyers a week before the new rules take effect.
The Apparent Winners
CHEVROLET, GMC, CADILLAC: General Motors not only plans to build all its future EVs in North America but has announced numerous mineral-sourcing contracts and is setting up at least three battery plants as joint ventures with its longtime cell partner LG Energy Solutions.
The company gave Car and Driver a statement that read: "We expect a number of our Ultium-based EVs, including the Cadillac Lyriq and additional EVs launching this year like the Chevrolet Equinox EV SUV and Blazer EV SUV, to qualify for the full $7500 credit in 2023." Of those, only the Lyriq is presently in production, albeit at low volumes thus far. Matthew Ybarra, GM senior manager of public policy communication, added that future versions of the upcoming Chevrolet Silverado EV pickup truck that are priced under $80,000 will also qualify.
Left open is the question of whether the Chevrolet Bolt EV and EUV, built in Michigan, qualify for the full $7500. Ybarra told Car and Driver that the company expects both Bolts "to qualify for some level of credit even after the new rules go into effect on April 18" and promises to share an update "in the near future."
FORD, LINCOLN: Last Wednesday, Ford said all six of the vehicles with plugs it now sells will be eligible for at least partial IRA credits. The Detroit-built Ford F-150 Lightning EV pickup gets the full $7500, as does the Chicago-built Lincoln Aviator Grand Touring plug-in hybrid.
The Mustang Mach-E (built in Mexico), the e-Transit commercial van (Kansas City), and the Ford Escape PHEV and Lincoln Corsair Grand Touring (both built in Louisville) get $3750 based on either location or the sources of their battery components and assembly.
TESLA: By far the largest U.S. maker of EVs, the Silicon Valley startup is now almost two decades old and has sold more than 4 million vehicles. It builds all four of its models and most of its battery packs in California, Nevada, and Texas, but its larger Model S and Model X exceed the price caps. Tesla does not communicate with the press, but it said 10 days ago it expects the rear-wheel-drive Model 3 to receive a lower tax credit—likely because of its China-sourced iron-phosphate battery.
We won't know until the final list of eligible vehicles drops, but perhaps compensating for more incentive cuts, earlier this month the company cut $5000 off the prices of Model S and Model X, $2000 off Model Y prices, and $1000 off the Model 3 sticker.
GENESIS: This month, the Korean luxury brand is launching the Genesis Electrified GV70, a battery-electric version of its popular GV70 compact crossover. That version, and only that version, is now assembled in the Hyundai plant in Montgomery, Alabama. As of Monday, said Jarred Pellat, the brand's senior manager for PR and communications, Genesis is "in the process of determining what, if any, portion of the EV tax credit the U.S. assembled Electrified GV70 qualifies for after the April 18 effective date."
