The list is down to only 20 vehicles.
If you purchased an electric vehicle (or certain plug-in hybrids) in the United States earlier today, you'd have qualified for a federal tax credit up to $7,500.
But after President Joe Biden signed the Inflation Reduction Act yesterday, there are now far fewer vehicles that will qualify thanks to a clause in the legislation stipulating that the car must be built in North America or a country that has a free-trade agreement with the USA.
CarBuzz previously estimated that only 12 EVs would still get the $7,500, and according to a new list from the US Department of Energy, we weren't far off. There are 28 vehicles on the list, though we don't believe all of them qualify if you consider the Inflation Reduction Act's guidelines.
These are the North American-built models (including Mexico and Canada) that we believe could qualify:
However, the list also mentions a few others that will clearly not fall below the $55,000 price cap on cars (sedans, wagons, hatchbacks) and $80,000 for trucks, SUVs, and vans. Since these restrictions will not kick in until 2023, a few may still be eligible if purchased before the end of 2022.
The following vehicles are listed on the US Department of Energy's website but will be too expensive to receive credits:
We also have questions regarding the Rivian lineup, which was included on the list despite the most affordable models not yet being in production. In fact, Rivian has been rushing its reservation holders into binding purchase contracts to secure the $7,500 credit before they are no longer eligible based on price.
Tesla's inclusion is questionable, too. The base Model 3 may have a battery sourced from China, which would likely render it ineligible for the tax credit.
This legislation's big winners and losers are clear; Ford, General Motors, and Stellantis reap most of the benefits. Collectively, 12 models from these three brands qualify for the credit.
The Chevy Bolt is the biggest winner, as its price will effectively go down to $19,095 now that the sales cap no longer applies.
Tesla is also a big winner, getting more credits (starting in 2023) for two models after previously blowing past the 200,000 cap under the previous system. Lucid and Rivian are big losers since they were nowhere close to selling 200,000 cars, and their products are considered "too expensive" under the new law.
We are also disappointed to see so many great EVs from South Korea excluded here. Buyers of the Hyundai Ioniq 5, Kia EV6, and Genesis GV60 will not receive a $7,500 credit.
So if you were choosing between the Ioniq 5, EV6, and Mustang Mach-E (all of which are priced similarly), the Ford now seems the obvious choice.
Also included are more details about how the tax credit changes will phase over time.
The North America final assembly requirement is the only one that came into effect instantly when Biden signed the bill, hence why some expensive models are still listed.
Additional provisions will begin on January 1, 2023, including the battery/mineral sourcing requirements, price caps, and income restrictions. Until then, any manufacturer that lost the credit due to the 200,000 cap will still not get it. Starting in 2024, the credit will be applied at the point of sale, allowing dealers to reduce the price of the car.
This legislation has some positives, especially as more automakers open up plants to build EVs in the US. But in the short term, this seems to limit (not improve) EV adoption.