So What’s The Deal With The Clean Vehicle Credit?
The new climate bill is bringing about a ton of changes.
Editors Note: Changes keep coming. Here are updated rules for claiming the clean vehicle credit as of October, 2023.
Many of the changes are still to be worked out, but the most interesting one to us is the Clean Vehicle Credit. Many of the credit’s changes go into effect on January 1st, 2023, but the biggest news was that starting on August 16th, 2022, in order for any electric car to receive the tax credit, it needs to be assembled in North America.
This stipulation immediately knocked fan-favorites like the Hyundai Ioniq 5 and the Kia EV6 off the list of vehicles that receive the federal tax credit, essentially bumping the price up by $7,500 in the long run. As soon as we enter the new year, new restrictions come into place.
Related: Hyundai IONIQ 5 First Drive: A Pivotal Moment for Hyundai—and for Electric Cars
More Restrictions may Mean you Spend More Money
These restrictions, aimed at making electric cars more affordable and incentivizing development of North American manufacturing, apply to both individuals and companies. Starting January 1st, 2023, eligible individuals will be limited to an individual adjusted gross income of $150,000 or less, a joint income of $300,000 per year, or filing head of household at $225,000 or less.
Previously there was a 200,000 vehicle limit for each manufacturer to receive the credit but no longer! Come the new year, that cap will be lifted. But this comes with mineral, mining, and battery manufacturing requirements that are set to ramp up significantly by 2026. To top it off, only electric cars with an MSRP of $55,000 and under and trucks and SUVs at $80,000 or less will qualify. These lofty goals may have good intentions but, in the meanwhile, may considerably limit what electric cars can receive any tax incentives starting 2023.
Fortunately, until January 1st, you can still snag the tax incentive on 2022 and 2023 model year EV’s that are assembled in North America, so which vehicles are they?
Audi
The 2022 Audi Q5 is a luxury compact SUV available in a plug-in hybrid powertrain that affords it the tax incentive. Starting at around $55,400, this small SUV sports a 17.9-kWh battery and a base 201-hp engine.
Related: Audi Q5 Sportback Luxury SUV Review: I’m in Love With the Shape of You
BMW
The 2022 and 2023 BMW 330e Plug-In Hybrid is a luxury sedan with a starting price of $43,300, a 12 kWh battery which comes to over 20 miles of electric range or, if you want something sportier and a bit more capable, turn your attention to the BMW X5 xDrive45e with a 24 kWh battery amounting to over 30 miles of range.
Related: Plug In and Charge Up: BMW’s Electric Cars are the Foundation of Its Future
Chrysler
Starting at $49,000, the 2022 Chrysler Pacifica Plug-In Hybrid is a versatile minivan for the whole family with 7 seats, an optional integrated vacuum, and an electric-only range of over 30 miles. It packs a ton of comfort and convenience features into a cushy and capable van.
Related: Chrysler Pacifica Hybrid: 8 Reasons to Love It
Ford
Perhaps unsurprisingly, this American legacy manufacturer tops the list with 4 fantastic offerings covering a wide range of vehicular needs. Kicking it off with the best selling pickup truck of all time, the All-Electric Ford F150 Lightning packs every beloved F150 feature into a quiet, powerful, and utterly capable truck that’s so popular that it’s already sold out for years. If you really want to get your hands on one, you’ll need to keep a close eye on dealerships for canceled orders and expect a hefty extra charge for the convenience.
Another popular (and currently sold-out) all-electric classic reenvisioned, the Ford Mustang Mach-E pulls together the Mustang aesthetic haunches, tri-bar tail lights, and aggressive curvature, in a useful SUV body type. Starting at around $43,895, this sleek pony gets you 247 miles of range.
A more affordable, if less exciting option, the 2022 Ford Escape Plug-In Hybrid starts at $35,455 and has up to 38 miles of electric range from its 14.4 kWh battery, and finally the 2022 Ford E-Transit Van sneaks in as an unassuming but incredibly useful cargo van packed with a ton of features, a 68 kilowatt-hour battery capable of 126 miles of range and a starting price of around $46,295.
Related: Everything You Need to Know About Owning the Ford Mustang Mach E
Jeep
With a starting price of $60,695, and a 14 kilowatt-hour battery capable of 26 miles of electric range, the 2022 Jeep Grand Cherokee 4xe Plug-In Hybrid is a sturdy option with the ability to tow 6000 lbs and off-road capabilities.
Powering into adventurous territory, the 2022 Jeep Wrangler 4xe Plug-In Hybrid is a sporty, off-roading powerhouse capable of 49 miles electric range with a starting price of $54,595
Related: Jeep Grand Cherokee 4xe Electric Car: All the Jeep You Want with None of the Gas Station Stops
Lincoln
The 2022 Lincoln Aviator and Corsair Plug-in Hybrids score 21 miles to 28 miles of range respectively. Starting at $51,810 for the Corsair and $68,980 for the Aviator, these luxury vehicles bring an upscale option to the hybrid offerings.
Related: 2020 Lincoln Aviator Review: The Innovative, Thoughtful Luxury 3-Row SUV That Considers How You Live
Lucid
With a starting price of $87,400 and a top price of $179,000, the 2022 Lucid Air is an expensive option for good reason. Even the entry-level option packs 480 horsepower and a whopping 406 miles of range. With options up to 1,111 horsepower and other trims with 520 miles of range, the Lucid Air is one of the longest range, fastest charging electric cars in the world.
Related: Lucid Motors Introduces Air: The Long-Lasting EV You Haven’t Heard Of
Nissan
Starting at $27,400, the budget-friendly 2022 and 2023 Nissan Leaf is a bargain even before the tax incentive. With 123 miles of range, and all the fun features typical of electric cars, like instant torque and regenerative braking, this is an excellent entry-level EV option. But be aware that all Leafs utilize the CHAdeMO charging system which, as opposed to the widely supported CCS, is far less supported and likely to be phased out in the coming years. If you only plan to charge at home, that may not be an issue, but utilizing public charging could be problematic down the line.
Related: The 2022 Nissan Leaf Had Me At Hello.
Rivian
The 2022 Rivian R1T (the T stands for Truck) starting at $73,000 and the 2022 Rivian R1S (the S stands for SUV) starting at $78,000, are electric adventure vehicles with a ton of unique features and super-fast charging, with access to the still-in-development Rivian Adventure Network of over 3,500 DC fast chargers. These unique vehicles are literally loaded with useful features that you may not find elsewhere.
Related: Rivian R1S First Drive: The First True 3-Row Electric SUV is Here. This is What it’s Like to Drive, and What You’ll Find Inside
Volvo
Starting at $51,250, the 2022 Volvo S60 Recharge Plug-In Hybrid has up to 41 miles electric range and a combined horsepower of 455, making it a powerful and agile sedan hybrid.
Related: 2019 Volvo S60:The Luxury Sedan That Offers More Than Just Posh Comforts
Mercedes
The decadently luxurious 2023 Mercedes EQS finishes our list with 350 miles of range, a 0-60 time of 5.9 seconds, and a starting price of $102,310. Sporting one of the most eye-catching interiors on the list, this plush sedan also features rear-wheel steering for an almost shockingly nimble drive.
Related: Mercedes EQS 450+: Anticipating Needs You Didn’t Even Know You Had!
But What About Tesla?
This list of vehicles was obtained from the U.S Department of Energy but, if you’d like to make sure that a vehicle you are interested in qualifies, you can check the VIN here. Some vehicles on the D.O.E list (like Teslas) do not currently qualify because the manufacturers have reached the previous 200,000 vehicle cap but hopefully, come January 1st, they will be available again as long as they meet the price limits of $55,000 for cars and $80,000 for trucks and SUVs. For example, GM will see their limit removed and the Chevrolet Bolt EV and EUV should qualify but the new Hummer Pickup and SUV exceed the $80,000 price.
Related: Why the Chevy Bolt May Be the Best Deal on an Electric Car Right Now
These new Clean Vehicle Credit restrictions and changes are evolving as we speak and the next few years could be extremely fluid in the electric car market. Come 2024 we should see the tax incentive move to the point of sale as a credit applied to the cost of your vehicle, which is super exciting for anyone who needs that price break to be able to afford a vehicle or who is intimidated by relying on a tax break that takes a year to see.
Another great change is the Used EV Tax Credit which will give income qualifying individuals $4000 in tax incentive on the purchase of an at least 2 year old EV, from a dealer, at $25,000 or less. Restrictions are to single-filers with a gross annual income of $75,000 or less, head-of-households with $112,500 and couples with max $150,000.
If you really want an electric car, and you need or want the tax incentive, you may need to keep a close eye on the vehicle you’re interested in, availability, and timing. The Chevy Bolt is one of the best value for money electric cars out there and, if it gets the tax credit in the new year, it may be a deal worth pouncing on when the opportunity presents! The Tesla Model Y and perhaps the Model 3 (in certain configurations) may qualify for the first time in years, which may delight any soon-to-be Tesla owners.
So that’s the deal with the Clean Vehicle Credit. Stay tuned because restrictions and qualifications could still change even more!
Categorized:Car Buying Electric Cars
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