As the world grapples with the critical issues facing our climate, many leaders around the globe are implementing new incentives to help promote green energy. Often, the high cost of transitioning away from fossil fuels to green energy has been limiting for those with constrained budgets.
For this reason, new incentives are being put into place that will help fund the purchase of green energy solutions. Much of the current consumer focus is on transitioning away from internal combustion engine (ICE) vehicles to electric vehicles (EVs).
In the United States, the Inflation Reduction Act (IRA), which was passed on August 16, 2022, aims to provide new tax credits for those interested in buying an EV. If you are one of the many concerned citizens of the planet who are looking for new ways to invest in a carbon-free lifestyle, these new EV incentives could help you transition toward a greener life.
Let’s take a look at what cars are eligible for the EV tax credit, what it provides you, and how you can use this to help cover EV costs.
Known as the Clean Vehicle Credit, the latest EV incentive helps fund the purchase of both new and used vehicles. Starting January 1, 2023, the Clean Vehicle Credit goes into effect and provides buyers with eligibility for a total of $7,500 in tax credit for the purchase of a new EV.
Note that new stipulations have been put into place with the passing of this EV incentive:
One of the best parts about the new IRA EV incentive is that it also allows buyers to earn credit towards a used EV. The used EV incentive is worth $4,000 or up to 30% of the vehicle’s price. In order to meet used EV requirements, the EV must be:
What is also great about this new EV tax credit is that, unlike the previous tax credits, consumers don’t need to wait until they file taxes to take advantage of the rebate. When you purchase your vehicle, you’ll receive the credit immediately. This is hugely beneficial for consumers who are concerned about taking out large amounts of financing for a vehicle. In the past, you would have financed the total purchase amount and waited for the rebate when you filed taxes. Now, you receive the money toward your purchase immediately.
While the new EV tax credit has opened up a lot more possibilities for consumers interested in buying an EV, it does come with some stipulations around the way in which a vehicle was manufactured and where the critical minerals for the vehicle’s battery were sourced.
Under these new stipulations, any EV that was not assembled in North America — e.g., the United States, Mexico, or Canada — does not qualify for the rebate, and vehicles that are utilizing critical minerals from certain areas of the world will not qualify. While some manufacturers will struggle to meet these new requirements, such as Tesla, which relies heavily on China for production, the good news is that many U.S. car-makers are rising to the occasion, providing quality options for consumers.
These regulations can, honestly, be a bit confusing. As a consumer, you might not be sure what vehicles will meet the new guidelines.
However, don’t sweat it. The U.S. Department of Energy has compiled a list of 2022 and 2023 EVS that meet the new guidelines. This data is based on the Fuel Economy labeling information and part data submitted by manufacturers to the U.S. Environmental Protection Agency and National Highway Traffic Safety Administration (NHTSA).
Keep in mind that this list is just the initial attempt at identifying what vehicles are eligible for the Clean Vehicle Credit. More vehicles will likely be added to the list as manufacturers are incentivized to meet the newest requirements.
| Model Year | Vehicle | Note |
| 2022 | Audi Q5 | |
| 2022 | BMW 330e | |
| 2022 | BMW X5 xDrive45e (PHEV) | |
| 2022 | Chevrolet Bolt EUV | Manufacturer sales cap met* |
| 2022 | Chevrolet Bolt EV | Manufacturer sales cap met |
| 2022 | Chrysler Pacifica PHEV | |
| 2022 | Ford E-Transit | |
| 2022 | Ford Escape PHEV | |
| 2022 | Ford F-150 Lightning | |
| 2022 | Ford Mustang MACH E | |
| 2022 | GMC Hummer EV Pickup | Manufacturer sales cap met |
| 2022 | GMC Hummer EV SUV | Manufacturer sales cap met |
| 2022 | Jeep Grand Cherokee 4xe | |
| 2022 | Jeep Wrangler 4xe | |
| 2022 | Lincoln Aviator PHEV | |
| 2022 | Lincoln Corsair PHEV | |
| 2022 | Lucid Air | |
| 2022 | Nissan Leaf | |
| 2022 | Rivian EDV | |
| 2022 | Rivian R1S | |
| 2022 | Rivian R1T | |
| 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 |
| 2022 | Volvo S60 Recharge | |
| 2023 | BMW 330e | |
| 2023 | BMW X5 xDrive45e (PHEV) | |
| 2023 | Cadillac Lyriq | Manufacturer sales cap met |
| 2023 | Chevrolet Bolt EV | Manufacturer sales cap met |
| 2023 | Ford E-Transit | |
| 2023 | Jeep Grand Cherokee 4xe | |
| 2023 | Jeep Wrangler 4xe | |
| 2023 | Lincoln Aviator PHEV | |
| 2023 | Lucid Air | |
| 2023 | Mercedes EQS SUV | |
| 2023 | Nissan Leaf | |
| 2023 | Rivian R1S | |
| 2023 | Rivian R1T | |
| 2023 | Tesla Model 3 | Manufacturer sales cap met |
| 2023 | Tesla Model S | Manufacturer sales cap met |
| 2023 | Tesla Model X | Manufacturer sales cap met |
| 2023 | Tesla Model Y | Manufacturer sales cap met |
| 2023 | Volkswagen ID.4 |
Source: This chart is provided by the U.S. Department of Energy. For the most up-to-date list, visit: https://afdc.energy.gov/laws/electric-vehicles-for-tax-credit
*Some manufacturers with vehicles assembled in North America have reached a cap of 200,000 EV credits and are, therefore, not currently eligible for the Clean Vehicle Credit.
The latest EV tax credit is a welcomed update to U.S. EV incentives. This new EV tax credit is opening doors for those who are seeking a more sustainable lifestyle. Not only that, but it is also increasing the incentive for vehicle makers to make the transition away from ICE vehicles to EVs.
As manufacturers continue to see the financial benefits of making this change, consumers will benefit from an increasing number of options on the market. We expect to see the above list continue to grow in size as vehicle makers adjust their processes, bringing more jobs to the United States and boosting our economy through green energy. That is truly a win for all.
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Published January 4, 2023 2:19AM
Eveelife is an eco-oriented lifestyle platform that helps consumers make more purposeful choices about how they live and what they consume. We do it by curating content and products that help them make more conscious, carbon-free choices while amplifying their EV ownership experience.
