This Weird Loophole Gives You the EV Tax Credit on Leased Vehicles

The federal EV Tax Credit was recently changed to favor vehicles made in the U.S., but in doing so, it disqualified a slew of vehicles for the credit, turning off buyers and leaving them with just 10 models from six different manufacturers to choose from. But there’s a loophole many buyers might not be aware of. CNBC reports buyers that lessees may find that disqualified EV gaining the $7,500 credit.

The loophole impacts leased vehicles. Under the Inflation Reduction Act, leasing is defined as a “commercial business.” As a result, the tax credit’s requirement that an EV and its battery be made in the U.S. don’t apply. Automakers are aware of this, and of course they love it. Lease rates at some automakers have gone up as more consumers find out about the loophole. Like Hyundai with its Ioniq 5:

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And you can save a pretty penny, too. A Cox Automotive analyst estimates that by using the loophole for the $7,500 tax credit, a 36 month lease on an EV that cost $50,000 would save the buyer $222 a month.