Putting The Brakes On EV Tax Credits

Some new and used electric cars may be getting more affordable for consumers thanks to new tax credits, but details in the fine print are causing confusion about which new vehicles might qualify for immediate savings.

As part of a broad new legislative package—the Inflation Reduction Act—that addresses climate change, healthcare, and taxes, there is a new tax credit of up to $4,000 on used electric cars and revised tax credits of up to $7,500 on certain new EVs.

But due to numerous new rules about where new EVs must be built and their batteries sourced, automakers argue that too few vehicles qualify, and EV advocates are concerned that the requirements may make it difficult for consumers to find a vehicle that qualifies for the credits.


Who notes EV automakers will be scrambling to provide certification for the clean sourcing of components, and he predicts that the phrase “blood lithium” will soon replace blood diamonds…

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I am bummed that the new law includes an apparent abrupt termination of the existing tax credits as soon as it’s signed into law. Why not let existing law carry on through the end of 2022? I’ve been shopping for an EV or plug-in hybrid, and since used ones are so pricey now, and I would be able to use the whole tax credit this year, I’ve been seriously thinking of buying a new car for the first time ever.

But, supplies are tight, and it seems like I won’t be able to secure a binding contract on one that I want before Biden signs it into law, so I’m SOL.

Then it looks like it may be years before we get enough of a US supply chain for most EVs made here to become eligible again. I’d thought maybe the Bolt would be eligible at least for 1/2 the credit next year, but on reading more, I doubt it will clear the necessary hurdles since so much is made in Korea and probably includes parts sourced in China.

So … guess I’ll be holding onto my old Prius and scoping out the used car market … $4k rebate on a used EV or plug-in will be nice if I can find a half-way decent deal, though with prices already high, I guess the rebate will just push them even higher.

Long run it should be good, but short run, probably not much help.

Oh, don’t worry. The requirements are so full of holes that pretty much anything will qualify.


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The requirements are so full of holes that pretty much anything will qualify.

Could you give some examples?


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