A new EV tax credit announced by the U.S. Treasury Department shares the possibility of an immediate financial incentive.
From 24 models, only 13 EV models can benefit from the new tax credit due to new rule implemented by the Biden administration. (Photo: Michigan Radio)
Easier Process For Financial Incentive
The U.S. Treasury Department has announced that over 9,000 auto dealers have registered for the point-of-sale electric vehicle (EV) tax credit which will help EV owners immediately receive their financial incentive. Such announcements regarding the financial incentive were launched on January 1st.
This follows changes made to the credit under the Inflation Reduction Act, which allows EV buyers, not only to receive immediate financial incentive but to also claim the tax credit at the time of purchase instead of waiting until the following year. This simplifies the process and provides an immediate financial incentive for prospective EV owners.
The increase in dealer registrations indicates a growing interest among auto dealers in promoting and selling electric vehicles as well as the need to receive financial incentive from EV owners. Dealers must submit a “time-of-sale report” after selling an EV to claim the rebate and financial incentive.
According to a published article by SmartNews, the Inflation Reduction Act not only introduced an easier process for claiming a financial incentive but also changed the tax credit eligibility criteria. These changes make EVs a more attractive option for consumers as they can immediately receive a financial incentive.
Eligible Models For Consumer Tax Credit
In a published article by Oil Price, the number of electric vehicle (EV) models eligible for consumer tax credits has decreased from 24 to 13 due to new rules implemented by the Biden administration. The tax credit of up to $7,500 no longer includes EVs with battery components manufactured by Chinese companies.
Some automakers are altering their supply chains to meet the new requirements and qualify for the credit. The Treasury Department plans to expand these regulations in 2025 to include suppliers of essential battery materials.
Depending on the manufacturing location of battery components, vehicles may qualify for either a $7,500 or $3,750 credit. Eligible models for the credit include Tesla’s Model Y, Rivian’s R1T, Stellantis’s Jeep Wrangler 4xe, and Ford’s F-150 Lightning. However, certain EV models like Tesla’s Cybertruck and Nissan’s Leaf have lost access to the credit.
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