The list of electric vehicles that qualify for the full $7,500 federal tax credit in the US has shrunk — considerably. Thanks to new requirements about battery minerals and sourcing that kicked in on January 1st, only five battery electric vehicles are eligible for the full credit as well as one plug-in hybrid vehicle. A few more qualify for the $3,750 half credit. And that’s about it.
Of course, this was all part of the phase-in process for new requirements under the Inflation Reduction Act of 2022. Thanks mostly to Sen. Joe Manchin , the tax credit is structured in a way to become more restrictive as time passes. EVs with battery materials and components sourced from “foreign entities of concern” are now ineligible for the tax credit. In 2025, additional requirements will kick in for minerals used in batteries, like lithium, cobalt, graphite, and nickel.
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