Here are the cars eligible for the $7,500 EV tax credit in the Inflation Reduction Act
The Inflation Reduction Act, the major climate bill, was signed today, changing the availability of electric vehicle tax credits. Now, only EVs assembled in North America qualify for the credits. Today the US government released a preliminary list of which vehicles currently qualify for the $7,500 EV tax credit.
There are a number of provisions in the new climate bill affecting the availability of EV credits, and those provisions will phase in over the coming months and years. Most of them are focused on bringing more EV and battery production to the US.
But the phase-in times of various provisions have created a lot of confusion in the EV community about which vehicles will qualify and when.
The Department of Energy’s Alternative Fuels Data Center has released the list of vehicles with final assembly in North America, and we’ve copied the list below.
We’ve added links where possible so you can search local dealer inventory for the car you’re looking for. We’ve also added our own notes in the “note” column to clarify which models qualify.
The list does include vehicles that are assembled in North America but for which the manufacturers are currently over the 200K unit cap on the previous credit. That cap is lifted on January 1, 2023, so cars tagged as “manufacturer sales cap met” will not qualify for the electric car tax credit until next year.
Note that this list is not written in stone, and will change with the phase-in of other provisions of the new EV tax credit or as manufacturers change their production plans (for example, VW moving 2023 ID.4 production to Tennessee). We can’t guarantee that any given customer will get access to the credit and are providing the best information we can.
Further, some models may change production mid-year or are based on specific trim levels, so you should confirm that your individual vehicle was assembled in a North American plant. The AFDC recommends that you use the NHTSA VIN decoder on your VIN to confirm that it was assembled in North America. The country name of the final assembly plant can be found under “plant information” at the bottom of the page.
Additionally, the IRS has released a page explaining section 30D of the Internal Revenue Code, which is the section that contains the EV tax credit. This includes a description of what a “written binding contract” is, which allowed EV buyers to take the “old” credit if they signed a purchase contract before the day the IRA was signed (today).
Other requirements which have not yet phased in include battery material and critical mineral sourcing guidelines that will be developed by the IRS. The IRS must issue those guidelines by the end of this year, but from the language on the page, it feels like the IRS probably won’t issue them until December 31 (or maybe that’s just wishful thinking on our part).
Some vehicles will not qualify for the EV tax credit once the IRS issues its guidance, due to being above the $55K MSRP cap for cars and $80K MSRP cap for trucks. Income caps will also be put into place, meaning those earning over $150K ($225K head of household, $300K filing jointly) will not qualify.
There’s also a provision to allow buyers to take advantage of the EV tax credit upfront at the point of sale, but from our reading of the bill, that doesn’t seem to go into place until 2024. The $4,000 used vehicle credit starts in 2023, as does a commercial vehicle credit.
Electrek’s Take
The confusing nature of these new EV tax credits is unfortunate, and we wish their implementation was made a little simpler and a little less sudden. But given the difficult political situation regarding the passing of the bill, once the Senate reached a breakthrough, nobody wanted to touch the bill’s language. So, unfortunately, with half of the Senate unwilling to support any legislation that might help Americans, we got what we got.
We hope the IRS will make implementation of the new EV tax credits easier by phasing everything in at the same time, and will be responsive to public comments, which we’ll inform you about when they become available.
The number of plug-in hybrids on the list is a little unfortunate – it feels like hybrids should get a smaller portion of the credits than full EVs. But considering the battery-supply-constrained environment we’re in, PHEVs do manage to electrify more vehicles per kWh than BEVs do. So as long as people are plugging in their PHEVs and not just using the engine, they’re still a beneficial thing in terms of decarbonization.
Also, PHEV sales levels have been low for years and aren’t rising, whereas BEVs are. All-electric is just a more pleasurable experience, so we still expect this will result in fewer ICE engines on the road.
Overall, despite these difficulties, the goals of the legislation will help to address the challenges EVs are having right now (mostly supply challenges), will encourage more environmentally and socially responsible sourcing of materials, and should apply to far more individual cars on the road than the previous legislation due to removal of the per-manufacturer cap and extension for another decade.
While we’ll have some growing pains with the new EV tax credit’s structure in the coming months and years, the law includes some much-needed changes to the tax credit which should help the industry as a whole, along with lots of other climate spending and action to help bring emissions down and improve the US’s position in the green energy economy of the future, so on balance, we’re happy about the law. It’s nice to see big climate action for once. Now we just need to push for more.
Frequently Asked Questions on the EV tax credit
Cars assembled in North America can qualify for up to $7,500 in federal EV tax credits – $3,750 if the battery components were built in North America, and $3,750 if “critical minerals” in the battery are sourced from the US or countries the US has free trade agreements with.
It has already started, though various provisions will phase in over the next months and years. The $55k/$80k price caps and 150k/300 income cap go into effect in 2023, and GM and Tesla vehicles will start qualifying for renewed credits in 2023. Cars assembled outside of NA already do not qualify for tax credits, unless a purchase agreement was signed before 8/16/22. Battery component restrictions go into effect in 2023 as well.
NA-assembled cars qualify for the EV tax credit, though in 2023 this will start depending on their price and where their battery components and critical minerals were sourced. The table above in this article shows a list of EVs and PHEVs assembled in NA, though we won’t know specifics on battery components and critical minerals until the IRS issues their guidance at end of year.
The IRS will release a form (this is last year’s) to fill out and file with your tax return. Starting in 2024, the credit will be claimable upfront at the time of purchase, without needing to file a tax return after the fact. The IRS is still working out the specifics.
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After a month off trying to wrap our heads around all the chaos surrounding EVs, solar, and everything else in Washington, we’re back with the biggest EV news stories of the day from Tesla, Ford, Volvo, and everyone else on today’s hiatus-busting episode of Quick Charge!
It just gets worse and worse for the Tesla true believers – especially those willing to put their money where Elon’s mouth is! One believer is set to lose nearly $50,000 betting on Tesla’s ability to deliver a Robotaxi service by the end of June (didn’t happen), and the controversial CEO’s most recent spat with President Trump had TSLA down nearly 5% in pre-morning trading.
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Hyundai is getting ready to shake things up. A new electric crossover SUV, likely the Hyundai IONIQ 2, is set to debut in the coming months. It will sit below the Kona Electric as Hyundai expands its entry-level EV lineup.
Is Hyundai launching the IONIQ 2 in 2026?
After launching the Inster late last year, Hyundai is already preparing to introduce a new entry-level EV in Europe.
Xavier Martinet, President and CEO of Hyundai Europe, confirmed that the new EV will be revealed “in the next few months.” It will be built in Europe and scheduled to go on sale in mid-2026.
Hyundai’s new electric crossover is expected to be a twin to the Kia EV2, which will likely arrive just ahead of it next year.
It will be underpinned by the same E-GMP platform, which powers all IONIQ and Kia EV models (EV3, EV4, EV5, EV6, and EV9).
Like the Kia EV3, it will likely be available with either a 58.3 kWh or 81.4 kWh battery pack option. The former provides a WLTP range of 267 miles while the latter is rated with up to 372 miles. All trims are powered by a single electric motor at the front, producing 201 hp and 209 lb-ft of torque.
Although it may share the same underpinnings as the EV2, Hyundai’s new entry-level EV will feature an advanced new software and infotainment system.
According to Autocar, the interior will represent a “step change” in terms of usability and features. The new system enables new functions, such as ambient lighting and sounds that adjust depending on the drive mode.
It’s expected to showcase Hyundai’s powerful new Pleos software and infotainment system. As an end-to-end software platform, Pleos connects everything from the infotainment system (Pleos Connect) to the Vehicle Operating System (OS) and the cloud.
Pleos is set to power Hyundai’s upcoming software-defined vehicles (SDVs) with new features like autonomous driving and real-time data analysis.
As an Android-based system, Pleos Connect features a “smartphone-like UI” with new functions including multi-window viewing and an AI voice assistant.
The new electric crossover is expected to start at around €30,000 ($35,400), or slightly less than the Kia EV3, priced from €35,990 ($42,500). It will sit between the Inster and Kona Electric in Hyundai’s lineup.
Hyundai said that it would launch the first EV with its next-gen infotainment system in Q2 2026. Will it be the IONIQ 2? Hyundai is expected to unveil the new entry-level EV at IAA Mobility in September. Stay tuned for more info. We’ll keep you updated with the latest.
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Tesla has unveiled its lithium-iron-phosphate (LFP) battery cell factory in Nevada and claims that it is nearly ready to start production.
Like several other automakers using LFP cells, Tesla relies heavily on Chinese manufacturers for its battery cell supply.
Tesla’s cheapest electric vehicles all utilize LFP cells, and its entire range of energy storage products, Megapacks and Powerwalls, also employ the more affordable LFP cell chemistry from Chinese manufacturers.
This reliance on Chinese manufacturers is less than ideal and particularly complicated for US automakers and battery pack manufacturers like Tesla, amid an ongoing trade war between the US and virtually the entire world, including China.
As of last year, a 25% tariff already applied to battery cells from China, but this increased to more than 80% under Trump before he paused some tariffs on China. It remains unclear where they will end up by the time negotiations are complete and the trade war is resolved, but many expect it to be higher.
Prior to Trump taking power, Tesla had already planned to build a small LFP battery factory in the US to avoid the 25% tariffs.
The automaker had secured older manufacturing equipment from one of its battery cell suppliers, CATL, and planned to deploy it in the US for small-scale production.
Tesla has now released new images of the factory in Nevada and claimed that it is “nearing completion”:
Here are a few images from inside the factory (via Tesla):
Previous reporting stated that Tesla aims to produce about 10 GWh of LFP battery cells per year at the new factory.
The cells are expected to be used in Tesla’s Megapack, produced in the US. Tesla currently has a capacity to produce 40 GWh of Megapacks annually at its factory in California. The company is also working on a new Megapack factory in Texas.
Ford is also developing its own LFP battery cell factory in Michigan, but this facility is significantly larger, with a planned production capacity of 35 GWh.
Electrek’s Take
It’s nice to see this in the US. LFP was a US/Canada invention, with Arumugam Manthiram and John B. Goodenough doing much of the early work, and researchers in Quebec making several contributions to help with commercialization.
But China saw the potential early and invested heavily in volume manufacturing of LFP cells and it now dominates the market.
Tesla is now producing most of its vehicles with LFP cells and all its stationary energy storage products.
It makes sense to invest in your own production. However, Tesla is unlikely to catch up to BYD and CATL, which dominate LFP cell production.
The move will help Tesla avoid tariffs on a small percentage of its Megapacks produced in the US. Ford’s effort is more ambitious.
It’s worth noting that both Ford’s and Tesla’s LFP plants were planned before Trump’s tariffs, which have had limited success in bringing manufacturing back to the US.
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