The federal government wants to incentivize you to drive clean. You could get a $7,500 tax credit if you buy an electric car by January 1, thanks to the Inflation Reduction Act.
If you buy, will you collect? Yes, some electric car buyers will collect the $7,500, but most will not, including many of the more popular electric vehicles around.
On Tuesday, President Biden signed what he calls “One of the most significant laws in our history;” the Inflation Reduction Act.
“It’s one of the signature achievements of Joe Biden in the Democratic Congress,” said Aubrey Jewett, a political scientist at UCF.
Jewett said the law has its pros, like cutting the cost of health insurance and offering new protections for the environment, but when it comes to electric cars and the promised tax credit, the devil is in the details.
“Some of these restrictions require the electric vehicles to be, and particularly the batteries to be made in the United States, or at least predominantly made in the United States,” said Jewett.
That requirement alone rules out many electric vehicles. The Biden administration put out a list of cars that are eligible for the $7,500 tax credit. You can find that list by clicking here or in the table below.
|2022||BMW 3-series Plug-In|
|2022||Chevrolet Bolt EUV||Manufacturer sales cap met|
|2022||Chevrolet Bolt EV||Manufacturer sales cap met|
|2022||Chrysler Pacifica PHEV|
|2022||Ford Escape PHEV|
|2022||Ford F Series|
|2022||Ford Mustang MACH E|
|2022||Ford Transit Van|
|2022||GMC Hummer Pickup||Manufacturer sales cap met|
|2022||GMC Hummer SUV||Manufacturer sales cap met|
|2022||Jeep Grand Cherokee PHEV|
|2022||Jeep Wrangler PHEV|
|2022||Lincoln Aviator PHEV|
|2022||Lincoln Corsair Plug-in|
|2022||Tesla Model 3||Manufacturer sales cap met|
|2022||Tesla Model S||Manufacturer sales cap met|
|2022||Tesla Model X||Manufacturer sales cap met|
|2022||Tesla Model Y||Manufacturer sales cap met|
|2023||BMW 3-series Plug-In|
|2023||Bolt EV||Manufacturer sales cap met|
|2023||Cadillac Lyriq||Manufacturer sales cap met|
The part that matters most, where it says Manufacturer sales cap met, means those cars are not eligible until next year.
Ford and GM raised their prices on electric vehicles by $6,000 to $8,000. Matching or exceeding the promised tax credit.
Ford said the price hike was “Due to significant material cost increases and other factors.”
“Now the new vehicle is costing 6,000 more than it did last year. Maybe you don’t save as much as congress intended you to save,” said Jewett.
The Alliance for Automotive Innovation says only 18% of the electric vehicles on the market are eligible for the tax credit.