Fewer EVs to Receive Full Tax Credits With New Provisions

April 3, 2023
New rules being put into effect as part of the Inflation Reduction Act will result in many new EVs not qualifying for a full $7,500 tax credit.

New rules being put into effect as part of the Inflation Reduction Act will result in many new EVs not qualifying for a full $7,500 tax credit, Detroit Free Press reports.

The U.S. Treasury Department has laid out new rules that will go into effect on April 18 which will limit “the percentage of battery parts and minerals that come from countries that don't have free trade or mineral agreements with the U.S.”

According to an e-Mobility analyst with Guidehouse Research, Sam Abuelsamid, the battery sourcing requirements will not be as difficult to meet as mineral requirements.

“The minerals requirement is going to be the really challenging one,” stated Abuelsamid. “Setting up refining for lithium in other locations is probably going to take the longest.”

Once the new provisions take effect next month, EVs not meeting those rules will either not be granted a tax credit, or will only receive half: $3,750. 

When a treasury official was questioned they were unable to provide “an estimate of how many EVs would be eligible under the new rules,” but said that a list would be available on April 18.

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FenderBender Staff Reporters

The FenderBender staff reporters have nearly three decades of combined journalism and collision repair experience.

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