The commercial EV credit comes with way fewer requirements that are far less difficult to achieve — and it could be a clever workaround for the passenger vehicle space. The commercial credit was designed to incentivize commercial fleets to electrify. It goes to the company buying the vehicle, like fleet manager, or an automaker or its finance arm. the law does not say that vehicles that claim the commercial credit through leasing have to be a commercial vehicle.
*Therefore, an automaker can currently get the credit simply by owning the vehicles it leases. They then aren’t required to pass the savings on to the lessee, but they could apply the $7,500 credit that they received to the price of the EV, and thus, lower a customer’s monthly payment. More automakers may opt to pass the credit on to consumers, if it gives them a leg up on competition.
The U.S. Treasury Department confirmed Thursday that buyers can effectively bypass both the American final assembly and critical-mineral requirements for electric vehicles—if those EVs are leased.
That means, according to Reuters, starting Jan. 1, automakers selling EVs with final assembly outside North America may be eligible for a commercial-vehicle tax credit of up to $7,500 if applied to subsidized leases, in what amounts to a workaround for the American-made requirements of the Inflation Reduction Act (IRA) and its restructured EV tax credit.
The above may change though.
“Some automakers and foreign governments are asking your agency for a broad interpretation of 45W that would allow rental cars, leased vehicles, and rideshare vehicles (such as those used for Uber and Lyft), a huge piece of the U.S. vehicle market, to be eligible for the full $7,500 commercial vehicle credit as a way to bypass the strict sourcing requirements,”
Hyundai and Kia want the U.S. Treasury to allow people leasing EVs to benefit from commercial credits and to qualify for up to a $4,000 tax credit for used EVs if they buy vehicles when leases expire
… thinking of the amount of time, writing, money, and deep thought has gone into finding a workaround for a badly written “law” that should have been a simple binary decision, similar to the original one back in what, 2015… if the pols are going to subsidize it, just make it simple!