Everything you need to know about the IRS’s new EV tax credit guidance
The US Treasury Department today announced its expected EV tax credit guidance on the battery component and critical mineral sourcing requirements of the Inflation Reduction Act, changing the availability of EV tax credits in the US, with the net effect of reducing tax credit amounts for many vehicles purchased on April 18 or later.
The Inflation Reduction Act includes a provision that limits the $7,500 EV tax credit to vehicles that are assembled in North America. Beyond that, a certain percentage of each car’s battery components need to be built in North America, and critical minerals need to be sourced from the US or a US free trade country, with these percentages increasing every year. Each of these two requirements make up half of the credit, so if a car qualifies for one but not the other, it’s eligible for $3,750 worth of federal tax credits.
The NA-assembled provision went into effect immediately in August when the bill was signed, but the battery sourcing provisions were left up to the Treasury to decide. It was originally supposed to announce those specifics by December, but pushed back the deadline until today.
This temporarily qualified some vehicles, like the Chevy Bolt (which will now remain a screaming deal through April 17), and some Tesla models for the full $7,500 credit. Both GM and Tesla have previously stated that they don’t expect to qualify for the full purchase credit when the new battery rules go into effect.
Senior administration officials advised that while fewer cars will qualify for the full credit in the short term, the law will work to strengthen the US industrial base and eventually there will be more cars that qualify as production gets on-shored.
In addition to the NA-assembly and battery provisions, cars over $55K and SUVs/trucks over $80K MSRP do not qualify. Also, taxpayers cannot claim the credit if their income is over $150K/$225K/$300K for single/head-of-household/married filing jointly.
The domestic assembly provisions caused some rankling in the international community when the bill was passed, with some foreign automakers and governments decrying it as a protectionist move. Since then, to help smooth over these complaints, the US signed a free trade deal for battery minerals with Japan earlier this week and is working on a similar agreement with Europe.
The Treasury has also suggested that it is still possible for foreign-assembled cars to still qualify for commercial tax credits if they’re leased, an interpretation that was pushed for by Hyundai and Kia (but opposed by the famously anti-EV Toyota). In this case, a dealership would file for the commercial credit and presumably could pass it on to the consumer in the form of lower lease payments.
Senior Treasury and White House officials said today that due to the domestic production provisions of the IRA, $45 billion worth of new electric car manufacturing investments have been announced since the act was signed. The administration said this accounts for tens of thousands of jobs across 24 states, along with several other commitments related to the law’s EV-adoption goals (more public charging, more electric transit, and so on).
Details of the new battery sourcing requirements
Thankfully, the new battery sourcing guidance today held few surprises. It is, however, going into effect a little later than expected: April 17, rather than the end of March (today).
So buyers will have a couple more weeks to purchase an EV before tax credit amounts are reduced, as the new guidance will be applicable to vehicles placed into service on April 18 or later. These vehicles may lose access to half or all of the tax credit, depending on where their battery components and critical minerals are sourced.
To meet requirements set up in the IRA, manufacturers must ensure that battery critical minerals are “extracted or processed in the US or any country with which the US has a free trade agreement,” or recycled in North America. They must also ensure that battery components are “manufactured or assembled in North America.”
Each of these legs accounts for half of the total $7,500 credit.
Each leg also has an “applicable percentage” based on the year the vehicle is “placed into service,” which can be seen in the flowchart below. The process of measuring whether a car meets these requirements is relatively straightforward, and involves identifying the value (rather than weight or volume) of each component or mineral used in the battery supply chain:
The Treasury seems like it intends to take a lenient view of what counts as a “free trade agreement” for the critical mineral provisions, and specifically noted that this week’s agreement with Japan counts. The list of countries it identified was: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, Singapore, and Japan
There is one more consideration: After 2024, batteries must contain no components whatsoever that were manufactured or assembled by a “foreign entity of concern” (FEOC) and after 2025, no critical minerals can be extracted, processed, or recycled by a FEOC.
The law itself does not specify a full list of FEOCs, so it falls upon the Treasury to provide that before the end of the year, when the rule first takes effect. The Treasury could not tell us whether this list would focus on national or subnational entities.
Presumably, some significant percentage of those entities will be associated with China, given that the IRA specifically intends to reduce the overreliance on China for batteries, whether the list ends up including all of China itself or not. A senior administration official specifically noted that many minerals currently get extracted in Australia and processed in China. The administration hopes some of those minerals could instead be processed perhaps in Japan, under the US’s newly signed trade agreement focused on environmental standards and workers’ rights.
And there is still a chance to iron out any wrinkles left in today’s guidance, as today’s rule is merely a “proposed” rule, rather than a final one. The proposed rule is published in the federal register, and public comments will be taken through June 16. This also means that vehicles placed into service between April 18 and whenever the final rule goes into effect will use the proposed rule, whereas later vehicles will use the final rule, in whatever form that rule takes. Any changes are likely to be minor.
With the new tax credit guidance only released today, a full list of qualifying vehicles is not yet available. Manufacturers will have to certify that their cars meet these new sourcing requirements and submit that information before the proposed rule goes into effect on April 17. The government will publish a list of eligible vehicles and the amount of credit each vehicle receives on fueleconomy.gov on April 18, and we at Electrek will keep you updated when that list comes out.
Electrek’s Take
With today’s battery sourcing guidance, we’ve moved one step closer to the end of the long and complicated EV tax credit implementation saga. Most provisions of the Inflation Reduction Act are now somewhat clear, with the primary exception of the future point-of-sale tax credits, slated for 2024, which will allow buyers instant access to EV discounts instead of having to wait to file their taxes.
There will be a few more changes over time, as manufacturers move to onshore production, or as the US government possibly makes more deals with other countries as it did with Japan this week. These should gradually qualify more cars for tax credit access.
On the other hand, some cars might lose out over time due to increases in the “applicable percentage” as years tick by. We’ll keep you updated about any changes as we learn about them, but hopefully things will settle into a bit more of a steady state from here on out.
It would have been nicer if the journey was a little simpler, but given that the legislation had the goal of not only increasing electric car adoption but also increasing American manufacturing in a world where manufacturing is so globalized, it was always going to end up being a little complex.
And in the end, more cars will take advantage of the tax credit than before, when credits were capped at 200,000 per manufacturer, so it’s still an improvement, if an imperfect one.
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Environment
EcoFlow DELTA 3 Plus exclusive offer at $535, Hoverfly foldable e-bike $423, Anker 90K mAh power station $198, more
We’re kicking off a new week here with a nice roundup of power station, e-bike, and other various markdowns in today’s edition of Green Deals. For starters, we’ve unpacked an exclusive offer on EcoFlow’s mid-range DELTA 3 Plus portable power station at $535, but you can also find the rather affordable Hoverfly foldable H3 e-bike as low as $423, and that’s alongside Anker’s SOLIX C300 AC 90,000mAh LiFePO4 power station at $198, but don’t sleep on that one because it expires at the end of the day.
Head below for more and, of course, Electrek’s best EV buying and leasing deals. Also, check out the new Electrek Tesla Shop for the best deals on Tesla accessories.
Exclusive: Here’s one of the best prices to date on EcoFlow’s mid-range DELTA 3 Plus portable power station at $535
We have secured an exclusive discount on the EcoFlow DELTA 3 Plus 1024Wh LiFePO4 Portable Power Station today for 9to5toys readers. Coming courtesy of the folks at Wellbots, using code 9TO5D3P at checkout will drop your total down to $534.65 shipped. Regularly listed at $799 directly from EcoFlow where it is currently marked down to $598, today’s deal delivers up to $264 in savings and the lowest price we can find.
For further comparison, this model is currently being sold for $699 on the EcoFlow Amazon storefront where the previous few deals had it sitting down at $616. We are also looking at a price drop that undercuts our previous exclusive discount from back in early February that had this model sitting down at $541.
EcoFlow’s DELTA 3 Plus first landed on Amazon back in September 2024 to deliver a mid-range portable power supply ready to handle both emergency situations and the modest off-grid setup you might have planned for this summer.
Carrying a 1,024Wh LiFePO4, it features an 1800W AC output, 2200W (surge 3600W) with X-Boost alongside five methods of recharging (AC, Solar, 800W Alternator Charger, Smart Generator 3000 (Dual Fuel), Multicharging) and as many years of coverage on the included 5-year warranty.
For me these power stations have always been as much about peace of mind as they are useful on the campsite. Just knowing I’ve come some serious battery power at the ready just in case of the worse at home is equally as valuable to me as the portable power action, and more than worth the price of entry. With this in mind, this model in particular sits right in that sweet spot for me – enough to handle some tech out in the wild and more than enough to me through power outages and the like.
Amazon takes Hoverfly’s foldable H3 e-bike with up to 28-mile range down as low as $423 (Reg. $529)
Over at Amazon you can now find the Hoverfly H3 16-inch Folding Electric Bike in blue down at $423.20 shipped. You can also score the black colorway for $424.99. Typically priced at $529, you’re looking at as much as $106 off. This is a return to the price we saw late last month and comes within $23 of the all-time low we tracked back in January. It’s not hard to spend well over $1,000 or an electric bike, so this is an affordable way to take one for a spin this year. You can learn more about this model down below.
Folks who have been itching to pick up an e-bike, but cannot justify a premium model that’s often accompanied by a high price can now pick up Hoverfly H3 for a much more affordable cost. The brand touts that it “can travel 15.5 miles on pure electric” and nearly double that when switching to a pedal-assisted mode which ratchets that up “to more than 28 miles.” Speeds top out at 15.5 MPH and the 280.8Wh battery is removeable, allowing you to easily swap it out with a second battery if you want to go even further. My favorite feature here is that not only is the e-bike more compact than most, but that it also can be folded when not in use.
Today only: Grab Anker’s SOLIX C300 AC 90,000mAh LiFePO4 power station at $198 (Reg. $250)
As a part of its Deals of the Day sale, Best Buy is offering Anker’s SOLIX C300 AC 90,000mAh power station for $198 shipped. This is regularly a $250 power station which is now seeing a straight up $51 discount. We’ve seen this model fetch as low as $179 during Black Friday last year with our exclusive promotional discount, but it hasn’t been that low in quite a while. Today’s deal lands it within $9 of our previous mention from earlier this year, and it’s now fetching $2 less than Anker’s discounted price.
Anker’s SOLIX C300 packs a hefty 90,000mAh LiFePO4 battery, delivering up to 600W of peak power (300W continuous), making it great for charging multiple devices and powering small appliances. Unlike the DC version that’s more USB-focused, the AC model featured here has three AC outlets, three USB-C ports, one USB-A port, and a 120W car/aux port. You can recharge the C300 in multiple ways – plug it into a wall to hit 80% under in under an hour, connect up to 100W of solar panels, charge via your car, or you can even use the PD 3.1 USB-C input. For added convenience, it includes a built-in carrying handle and a light bar above the display.
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Kia announced pricing for the upcoming 2025 EV6, with lots of improvements from a mid-cycle refresh and only a slight price bump from the previous model.
The 2025 Kia EV6 has been a long time coming… and unfortunately it’s still “coming,” but at least today we’re seeing one more step towards its imminence, and the news is honestly pretty good.
To recap some of the details of the refresh of Kia’s popular electric model, this year’s EV6 is getting a few interior and exterior design changes, a quieter interior, much better vehicle-to-load capability (12kW, up from 1.8kW), a ~10% bump in battery capacity for both the smaller and larger battery options, and support for over-the-air vehicle software updates. The EV6 GT trim gains some more horsepower, but other models stay the same.
The new EV6 also comes with a native NACS port, making it one of the first non-Tesla vehicles to have this feature. It joins its cousin vehicle, the Hyundai Ioniq 5 with which it shares the E-GMP platform, as some of the only cars on the road with a native NACS port (the Ioniq 5 recently charged faster than a Tesla on the same Supercharger), after the Ioniq 5 also got a big refresh this year.
The native NACS port is also accompanied by a relocation of the EV6’s charge port (on all but the GT model) – from the right side of the car to the left, to better mirror Tesla’s charge port location and make it easier to fit into Superchargers (while we wait for Tesla to add longer cables).
So, with all these changes, alongside stupid government actions aimed at increasing inflation for Americans, we’d perhaps expect a price bump… and it turns out we got a relatively small price bump, of just a few hundred dollars on the low-end specs, though rising to a $2,200 increase on the top-end GT spec (the only one with a horsepower boost).
Here’s the new pricing, compared to the old pricing:
| Pricing – MSRP1 (excludes $1,475 destination) | Old price | New price |
| EV6 Light | $42,600 | $42,900 |
| EV6 Light Long Range RWD | $45,950 | $46,200 |
| EV6 Light Long Range AWD | $49,850 | $50,300 |
| EV6 Wind | $48,700 | $50,300 |
| EV6 GT-Line | $52,900 | $54,200 |
| EV6 Wind AWD | $52,600 | $54,300 |
| EV6 GT-Line AWD | $57,600 | $58,900 |
| EV6 GT | $61,600 | $63,800 |
Perhaps one reason Kia was able to avoid larger inevitable price increases that are coming to many products for Americans as a result of boneheaded tariff announcements is because the 2025 EV6 will be built in Kia’s facility in Georgia (except for the top-end GT trim).
And best of all, the EV6 still qualifies for the US EV tax credit (again, except for the GT trim, which is still built in Korea). So you can still get it for cheaper than the listed price above, at least until Donald Trump and Elon Musk continue on their quest of making your life more expensive.
Kia says the models are in production now, but we’re still waiting on them getting delivered to customers. Usually vehicles come out a little bit before their model year starts (so 2025 cars will ship in the last few months of 2024), but the 2025 EV6 has taken its sweet time coming out. We suspect the NACS transition has had something to do with this (there has, after all, been a lot of back and forth about Kia Supercharger compatibility…), but Kia is tight-lipped about the reasons for such.
This move suggests that we finally might not have much longer to wait, though, so start getting ready and maybe call your local dealer if you want to get in line for the new EV6 (and hopefully get it before some bonehead tries to raise its price more or gets rid of tax credits because his oil bosses said so).
If you’d like, you can use our affiliate link to get in touch with your local dealers about the Kia EV6, and try to be one of the first in line to get the newest iteration of one of the better EVs on the road.
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Environment
Tesla is being squeezed out of the Chinese market, workers are being pushed to their limits
Tesla is being squeezed out of the Chinese market, and the pressure is currently falling on the sales workers, who are reportedly being pushed to their limits.
Over the last few years, Chinese automakers have stepped up their game significantly, and they are now not only competitive at the lower end of the market with affordable electric vehicles. They are also starting to put pressure on higher-end automakers, like Tesla.
China is the world’s biggest EV market by a significant margin, and it has been a critical part of Tesla’s growth phase from 2020 to 2023.
But now Tesla is facing incredible competition from the likes of BYD, Xiaomi, NIO, Li Auto, and others.
We reported earlier this year that Xiaomi’s SU7 has overtaken Tesla’s Model 3 in China, and now it is coming with a Model Y competitor.
Tesla has been hoping that its updated Model Y would help it stay comptivie in the Chinese market, but there are now reports to the contrary
The automaker has already been offering subsidized 0% financing to try to boost Model Y and Model 3 sales in the country.
Now, a new report on China’s Jiemian News based on interviews with current and former Tesla salespeople in China claims Tesla is now pushing for its Chinese sales staff to work 13 hours a day every day (translated from Chinese):
As the group that deals with the most front-line consumers, Tesla sales have in fact clearly felt the strong pressure to close deals. Many Tesla sales told Jiemian News that due to the inability to meet assessment targets on time, they have given up their two-day weekend off and switched to working seven days a week, “working from 9 a.m. to 10 p.m. every day, with an average daily working time of nearly 13 hours.”
The report claims that Tesla has instructed sales staff to aim for selling a car every day, but they are having trouble achieving half that rate:
According to the Tesla salesperson, the store assessment standard in Beijing is to sell at least one car per day, which means that they need to sell about 30 cars per month. But in reality, it is difficult for many salespeople in the store to sell 3 to 4 cars per week. They need to keep following up with customers and try their best to persuade them in order to get as close to the target as possible.
To sell a car per day, Tesla sales staff are told to create 10 user profiles, complete three online test drive invitations, and complete four test drives every day.
According to the report, the higher requirements also come with limited pay – resulting in record turnover at some of Tesla’s stores in China.
They used a Tesla store in Beijing as an example, where they claim they can do a full sales staff turnover in just a month and a half.
One Tesla salesperson told Jiemian that it is now way more difficult to sell Tesla vehicles in China:
“The days when we didn’t have to introduce products to users and orders were ‘automatically’ delivered to their doorsteps are gone forever.”
Tesla was also a victim of its own success in the country, where its vehicles have become somewhat familiar in the last few years, and the brand is no longer perceived as premium as it was in 2022-2023.
Electrek’s Take
Tesla was having problems in China before Trump’s election, but the problems appear to be getting worse.
Since last year, Tesla has already basically not been making any money on the Chinese market since it primarily sells lower-end RWD Model 3 and Model Y vehicles, which are already low-margin products, and Tesla has to subsidize them with 0% financing on top of it.
That’s in large part due to competition.
Unlike in North America and Europe, Tesla hasn’t been suffering from brand issues due to Elon Musk’s involvement in politics in China, but it might be changing now.
Trump’s escalating trade war with China is reaching new heights, deterring Chinese consumers from purchasing American brands.
I think Tesla was already being squeezed out of the Chinese market due to competition, but the trade war is likely to accelerate this process.
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