Tax Credits for Electric Vehicles
Sep 01, 2022
As electric vehicles become more common, lawmakers want to bolster production in the U.S. by offering tax credits to people who buy electric and plug-in hybrid vehicles. With the rise in gas prices earlier this year, more people are considering buying electric vehicles. The tax credit, which ranges from $2,500 to $7,500, makes buying electric even more appealing. However, there are some limitations to the Plug-In Electric Drive Vehicle Credit detailed in the recently enacted Inflation Reduction Act.
The credit is only available to:
- Individuals earning less than $150,000 per year
- Married couples earning less than $300,000 per year
The credit can only be used on EVs costing:
- Less than $55,000 for cars
- Less than $80,000 for SUVs and vans
In addition to the price restrictions, vehicles must be assembled in the U.S. to qualify. This means not all makes qualify for the tax credit.
Eligible 2022 models include:
- Audi Q5
- BMW: 3-series Plug-In and X5
- Chrysler Pacifica PHEV
- Ford: Escape PHEV, F Series, Mustang MACH E, and Transit Van
- Jeep Grand Cherokee PHEV, Wrangler PHEV
- Lincoln Aviator PHEV, Corsair Plug-in
- Lucid Air
- Nissan Leaf
- Rivian: EDV, R1S, R1T
- Volvo S60
Eligible 2023 models include:
- BMW 3-series Plug-In
- Mercedes EQS SUV
- Nissan Leaf
For a full list, visit the U.S. Department of Energy’s Alternative Fuels Data Center.
Another factor to consider is vehicle caps. There is a 200,000-vehicle cap on the credit and some manufacturers have already reached the threshold. As of this writing, various Chevrolet Bolts, GMC Hummers, and Tesla models have reached the cap for 2022. So, although those models were eligible, the credit won’t apply.
To see additional EV incentives available in Kansas, visit the U.S. Department of Energy’s Alternative Fuels Data Center.