How to bypass nearly every restriction of the EV tax credit by leasing
Last week, the IRS updated the EV tax credit with new battery sourcing requirements set to go into place on April 17, with the effect of lowering purchase credit amounts for many new EVs.
But since the law defines individual and commercial credits differently, those requirements – along with MSRP and income requirements – can be bypassed on consumer-leased vehicles.
The Inflation Reduction Act changed the way EV tax credits are defined, making them simultaneously more complicated and more restrictive but also increasing their availability to more total vehicles in the long run.
There are a lot of new requirements, including maximum MSRP (which differs for cars and trucks/SUVs), income limits for taxpayers, and new battery requirements. Plus, cars need to be assembled in North America to qualify. This means several vehicles no longer get a tax credit after the changes last August.
The tax credit is also nonrefundable, which means that taxpayers need to make enough money to have $7,500 of tax liability to be reduced, but not enough to be above the income limit. Additionally, taxpayers need to wait until they file their taxes in order to take advantage of the credit, which means they have to front the $7,500 and get it back later. But both of these downsides will be fixed next year when the tax credit is due to become available upfront at the point of sale.
“One simple trick” to bypass tax credit restrictions
But all of these complications can seemingly be avoided with one simple trick! – leasing.
Per an IRS note from December, EVs can avoid the foreign-assembly restriction of the law if they are leased, not purchased. This interpretation was originally pushed for by South Korean automakers who felt jilted by the domestic assembly provisions of the Inflation Reduction Act. Hyundai and Kia have been the best-selling non-American EV brands in the US with their excellent Ioniq 5 and EV6 (built on the E-GMP platform), so these changes threatened to take the wind out of their sails (and sales).
The reason for this is due to two different sections of the law: 30D and 45W. Section 30D deals with individual purchase credits, and 45W deals with commercial credits. One is meant to stimulate personal vehicle purchases, while the other is intended to stimulate large commercial EVs like buses and dump trucks but also smaller vehicles for purchase or lease in commercial fleets.
All of the aforementioned restrictions are only present in section 30D of the law, not section 45W. Commercial vehicles can be over 80k MSRP, they can be assembled outside of NA, their battery sourcing isn’t as controlled, and buyers can make more than $150k income.
The “loophole” comes in due to the IRS’ December interpretation of how leases are categorized. IRS states in their fact sheet (topic G, Q5) that businesses that lease vehicles are allowed to claim the commercial EV tax credit for each leased vehicle. This means that as long as the vehicle fulfills the relatively minor requirements of 45W (and is a “bona fide lease” as laid out in Q6 of the same fact sheet), then a lessor (i.e., a dealership) can file for the $7,500 EV tax credit. This applies regardless of whether the lessee is a business or an individual.
Presumably, then, the lessor would be able to pass along those savings in the form of reduced lease payments.
Some brands already offering $7,500 off leases
So far, this particular workaround has not gotten much press. Since these credits are filed for on the back end by dealerships and don’t really require action from the consumer, it’s up to dealers to notice this and offer lease discounts.
But consumers should still know about these deals, as EVs are often cheaper than their MSRP might suggest. For many years, under the old credit, you’d routinely see an EV with around $30k MSRP leasing for approximately $199 per month.
A few manufacturers have already started offering lease discounts. Hyundai is offering significant discounts on the Hyundai Kona EV and the excellent Hyundai Ioniq 5. Polestar has a “Clean Vehicle Lease Rebate” on the Polestar 2 (which it says will expire May 1, though there is nothing in the law suggesting that will happen), and Lucid offers $7,500 off on leases as well. Tesla’s head of policy recently acknowledged that the law allows for this interpretation, but Tesla hasn’t announced any specific lease discount.
As word gets out about this workaround, we would hope to see more companies offer lease discounts and for EV leasing to perhaps become more prominent, especially among those brands that don’t qualify for the full EV tax credit. For example, the Chevy Bolt EV and Bolt EUV, the Ford Mach-E, E-Transit, Escape PHEV, and Corsair PHEV, and the standard range Tesla Model 3 are all expected to have their credit amounts reduced come April 17.
But for all of these cars, due to the way the commercial tax credit works, it looks like leasing could give access to the full $7,500. It’s just on the dealers to file for it and pass it along to the consumer.
However, given that the EV market is still impacted by high demand and low availability, some brands and dealers may think they don’t need to pass along these savings because they’ll be able to sell or lease cars regardless to a populace that ravenously demands the limited available supply. We’re not seeing those “$199 per month” EV lease deals that we used to see (and which we catalog here on Electrek) because EV demand is just so high right now.
Hopefully, if EV demand starts to normalize, this will be reflected in EV lease prices. Then, we might see some big growth in EV leasing as consumers see that better deals are available.
But EV demand might not normalize until ICE cars die out, which is a trend we’re seeing signs of in China right now and which could repeat in other markets as well.
Electrek’s Take
We noticed this “loophole,” if you want to call it that, a little while ago but thought it was too good to be true. If leasing means the foreign assembly provision could be bypassed, as we learned in the IRS note in December, then why can’t other 30D provisions be worked around?
But this isn’t necessarily solely a positive development. On the one hand, it makes the process much simpler for the consumer since you can just lease any car, and the tax credit gets dealt with by someone else. No need for a fancy flowchart; just go in and get a cheaper lease.
But on the other hand, it also undermines the whole point of the law. The IRA was passed to encourage domestic manufacturing, particularly of green vehicles. And it has done so – the Biden Administration says that $45 billion in EV manufacturing investments have been made since the law was passed, and it looks like there’s more to come.
These boosts in manufacturing are important, because as mentioned above, EV supply lags far behind EV demand, and I believe the best way to accelerate EV adoption is to actually start building them. Knowledge of this workaround could jeopardize the strides we’ve made in EV manufacturing commitments.
If companies can easily get around those domestic assembly provisions with a lease, then that could give them less incentive to accelerate their domestic EV manufacturing plans. US Senator Joe Manchin, who was instrumental in crafting the domestic assembly provisions of the IRA and getting the law passed in the first place, has spoken out against this lenient interpretation of the commercial credit, even calling it a “betrayal.”
That said, leasing makes up a small percentage of the car market (less than one-fifth) and an even smaller percentage of the EV market (about one-tenth). Many consumers just would rather not lease. There are plenty of people who could get away with – and even save lots of money from – not owning a car. But part of the psychological draw of owning a car is the idea of freedom that it gives you, and leases take away some of that freedom – it’s not your car, and you’re not allowed to use it exactly how you want: mileage restrictions, worries about penalties for scratches or dings at lease end, etc.
So there’s still some incentive for manufacturers to announce more car and battery factories since it’s unlikely that leasing will make up a majority of EV sales, even with big incentives. Even when lease deals were rampant, they still didn’t make up a majority of EV sales.
Of course, demand is still much higher than supply. So companies should be announcing car factories and battery factories everywhere all the time. Nobody is ramping up fast enough, so they should all take any excuse to ramp up faster, both due to the market and the ever-important threat of climate change.
So even though everything about these tax credits has been somewhat, let’s say, “inartful” in its implementation, I think, on the whole, we’ve gotten close to an end-point of a law that expands the availability of tax credits to more people, while still also encouraging increased domestic manufacturing and a multipolar EV manufacturing environment. This will have beneficial aspects both for US EV adoption and for the industry in general.
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SUPER73 just pulled the curtain off its latest e-bike, the SUPER73-MZFT, and it looks like the brand is coming back to its roots – with a twist. Known for building retro-inspired, moto-style electric bikes that blur the line between fun and functional, SUPER73 now says the MZFT represents the first in a new generation of e-bikes that’s designed to welcome in a broader, more diverse group of riders – especially those just getting started.
If you’re familiar with SUPER73’s range, you’ll know the brand splits its lineup into several series – the Youth Series for smaller riders, and the Z, S, and R Series for full-size adults. The new MZFT splits the difference. It’s designed as a stepping stone into the bigger leagues, but still built with the same style and swagger that made SUPER73 a household name among e-bike fans, celebrities, and sneakerheads alike.
The bike features a 500W rear hub motor with a top speed of 20 mph, putting it firmly in Class 2 territory with throttle-first riding right out of the gate. That makes it ideal for new riders, younger adults, or anyone who just wants to rip around without worrying about pedaling uphill. Speaking of which, the company says the MZFT includes a new powertrain designed for improved uphill acceleration, addressing one of the most common weak points in budget-friendly e-bikes.
The 52V 10Ah battery offers 520Wh of capacity and is reportedly sufficient for a range of 15-20 miles (25-32 km) per charge.
SUPER73 says this is their most durable frame yet, and it comes paired with a resilient thru-axle setup, giving the MZFT a stronger and more stable feel under the rider. At 27 inches, the seat height is lower than most SUPER73 models, which will appeal to younger riders or shorter adults looking for something approachable but still styled like a street-ready moto machine.
New features include a modular second battery option (sold separately) that can boost your range up to 40 miles (64 km), and even a bit of built-in internal lockable storage, which is a rare find on electric bicycles.
Hydraulic brakes, LED lighting, and aggressive Vee Jakal tires round out the spec sheet. The total weight comes in at 85 pounds (39 kg), which is beefy but par for the course with SUPER73’s rugged design language. That said, while it may slot well into the typical SUPER73 weight class, it’s still a lot of poundage for a 500W e-bike.
The SUPER73-MZFT launches in two colorways: Cullen Berry (a dark, rich red-purple) and Titanium Ore (a stealthy gray metallic). Either way, the bike oozes the brand’s signature retro moto vibes without the steeper price tag of its S- or R-Series siblings.
But of course, the kicker is always the price, and here we’re looking at a $1,995 e-bike. While that’s definitely the most affordable in SUPER73’s lineup, it’s still a hefty chunk of change for a bike of these performance specs.
Electrek’s Take
SUPER73 has been riding the wave of moto-style e-bikes since long before it was trendy – in fact they pretty much built that trend. And while the brand is best known for its premium, eye-catching bikes with celeb street cred, it’s smart to see them lean back into accessibility. They’ve also been pushing for more inclusion of younger riders paired with proper e-bike education for those riders (believe it or not), and so this fits that strategy well.
The SUPER73-MZFT is clearly designed to attract a new wave of riders: younger and newer riders whose parents won’t buy them a 40 mph Sur Ron, but who still want to feel like they’re part of something cool. With a fun design, expandable battery potential, hydraulic brakes, and a few unexpected surprises like lockable storage, the MZFT could be a strong seller for riders who want something more than a basic commuter but aren’t quite ready to pony up for an R Adventure model.
That being said, it’s not exactly a leader in the watt-per-pound metric, and so we’ll have to see if it has the performance to match the look. And at $2,000, this is perhaps one of the most expensive teen-focused e-bikes out there. While it is true that it is the most affordable way to get into a SUPER73, that’s not exactly a great dollar-per-watt proposition. But then again, very few people have ever bought a SUPER73 because it made fiscal sense; they did it because they wanted a SUPER73.
And so if kids like this model and if it means more people are getting into e-bikes, especially street-legal e-bikes, then I’m all for it.
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Tesla is launching a new car rental program out of its stores in the US, as sales are crashing due to the end of the federal tax credit.
It’s available at select stores in the US right now.
Tesla’s demand in the US, like that of most other electric vehicles, has crashed after the federal tax credit for electric cars ended last quarter, pulling forward a lot of demand.
With inventories piling up at stores and dealers across the country, Tesla has found a new way to use its inventory: it is now renting (not leasing) its vehicles from its stores.
The rental duration is a minimum of three and a maximum of seven days, starting at $60 per day and increasing depending on the model.
Tesla appears to be using this to show potential buyers how convenient it is to own a Tesla vehicle, since it also includes Supercharging and Full Self-Driving (Supervised) for free with every rental.
If a rental customer decides to order a vehicle within a week of having rented one, Tesla gives them a $250 credit toward the purchase:
Order your own Tesla within seven days of your rental to get up to a $250 credit toward your purchase.
The program is starting with a couple of locations in Southern California, but it is expected to expand before the end of the year.
Car rental giant Hertz has previously bought a large fleet of Tesla vehicles in an effort to electrify its rental fleet.
However, Hertz has been divesting from Tesla vehicles and selling them over the last 2 years, as declining resale values crushed its fleet economics amid Tesla slashing prices due to declining demand over the last 3 years.
Electrek’s Take
It’s rough out there for people selling electric vehicles in the US right now. The lack of policy consistency is resulting in inconsistent demand and discouraging automakers from pushing electric cars, as they do in Europe and Asia.
It’s particularly challenging for automakers like Tesla, Rivian, and Lucid, which sell only electric vehicles, because most people who planned to buy an electric vehicle in 2025 have already bought one in Q3 or earlier.
This rental service is not a bad idea, though, but it’s obviously far from a solution to the demand problem in the US.
It’s wild to think that Tesla’s own CEO is largely responsible for creating this situation by backing Trump in the last elections.
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NIU is back at EICMA 2025 (the Milan Motorcycle Show) with a fresh lineup of electric two-wheelers that push the boundaries of performance, design, and smart connectivity. The Chinese electric mobility giant, already known for selling over 5 million electric scooters and motorcycles across over 50 countries, used the Milan show to unveil its 2026 product range – and it’s clear NIU is looking to hang on to that leader status.
For those unfamiliar, NIU launched its first electric scooter way back in 2015 and quickly rose to prominence with sleek, connected vehicles that combined urban practicality with stylish design. There are a lot of electric scooters out there now, but NIU has consistently been known for high-tech and slick-looking models.
Now, a decade later, NIU’s lineup has matured into a globally recognized suite of smart mopeds, e-bikes, scooters, and electric motorcycles. And at this year’s EICMA, the company made it clear that it’s ready to dominate even more niches.
A smarter NQiX Series
The NQiX Series has already gained traction in Europe’s L1e and L3e vehicle categories, but for 2026, it’s getting even better. All models in the series will be updated with improved motor and battery efficiency for longer range and better consistency. Most notably, NIU is adding onboard navigation powered by Google Maps – a major step toward true “smart” scooters.
The biggest news, though, is the introduction of the NQiX 1000. Packing 15.5 kW of peak power and topping out at 125 km/h (78 mph), this model is aimed at commuters who want speed, range, and flexibility. With three removable 72V 28Ah batteries and over 100 km of range, it looks set to be a practical yet powerful urban workhorse. The NQiX 1000 will launch in Q3 2026 with a starting price of €6,499.
My first NIU scooter ever was an NQiGT that I got back in 2020, and it helped me fall in love with the brand. The NQiX series has extended what made the original so impressive, and the NQiX 1000 will push that model line into brand new territory, both for technology and for performance.
FQiX brings a fresh face to urban riding
NIU also introduced a completely new design platform called the FQiX Series, targeted at city dwellers who want tech-forward transportation with a bit of flair. Think sleek body lines, distinctive lighting, and a minimalist aesthetic – paired with smart features like a 5-inch TFT display, rear radar, and Bluetooth/NFC/keyless unlocking.
The FQiX 150 (L1e) and FQiX 300 (L3e) offer two tiers of performance but share the same connected tech ecosystem, powered by NIU’s new “Link Crown” interface. These will also arrive by Q3 2026, starting at just €2,399 – making them a compelling choice for first-time e-scooter riders.
This one definitely feels like NIU’s targetted attempt to bring on younger, more budget conscious riders while still giving them access to the technology that separates the brands’ scooters from much of the competition.
XQi goes off-road (and on-road, too)
NIU has been teasing off-road ambitions for years, but the new XQi 300, XQi 400, and XQi 500 take those ambitions up several notches. They follow on the heels of the successful launch of the NIU XQi3, which, for a lack of a better way to describe it, is NIU’s Sur Ron competitor. I had the chance to test it out recently on a trip to tour NIU’s factory. But unlike Sur Rons, Talarias, and most other light electric dirt bikes in this category, NIU made the XQi3 street-legal from the start, meaning riders could register it like a motorcycle and also ride on trails.
Now the XQi3 has been revamped into the XQi 300, keeping much of what made it a success untouched, but adding highly requested features like on-board charging so the battery doesn’t need to be unplugged to recharge. The XQi 400 and XQi 500 add even more power and performance, competing more with the Sur Ron Storm Bee. The XQi 500 Street, in particular, is likely to prove quite popular as a street-legal electric dirt bike with a massive 28.8 kW peak output and a top speed of 110 km/h (68 mph), all in a fairly lightweight 92 kg (203 lb) chassis.
Concept 06 maxi-scooter
NIU also showed off a concept for a potentially upcoming maxi-scooter, and it sounds like they actually want to produce it. This likely isn’t just a crazy concept that will never see the road, but rather a roadmap to what could be NIU’s biggest scooter yet.
The company is projecting impressive performance, including a 20 kW motor, speeds of up to 155 km/h (96 MPH), plus fancy features like a tray table so you can get some laptop work done while you’re charging up.
Electrek’s Take
NIU continues to impress me with its mix of smart tech, eye-catching design, and impressive performance. The addition of Google Maps integration and radar safety features is a clear step forward that I’m excited to see implemented. And with models like the XQi 1000, NIU is branching into serious performance territory. And the new off-road bikes (with street-legal status to ride on the road too!) take what was already a great design and make it even more powerful – and convenient to use.
While some of the subscription models might turn off some users, the base functionality of these vehicles seems generous enough to keep most people happy. And all of that tech on top is what helps separate NIU. If the pricing holds and the specs deliver, I think NIU’s 2026 lineup could shake up both urban and off-road electric mobility in a big way.
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