Most people already know that for more than ten years, the federal government has been pushing for the creation and sale of electric cars. As part of these benefits, the Internal Revenue Service (IRS) has given a $7,500 tax credit for certain cars since 2010. After the 2022 Inflation Reduction Act (IRA) was passed, the list of cars that could benefit from it was greatly reduced. It has since been reduced again. Though electric cars have been around for a long time (they have), the technology behind them is still pretty new. Because of this, most of them are still pricey compared to similar gas-powered choices. The federal government has helped pay for the production and sale of electric cars for more than ten years, hoping to lower costs and speed up the switch. Since 2010, the Internal Revenue Service has backed government incentives for people who buy electric cars by giving them a $7,500 tax credit. The Biden Administration then passed the Inflation Reduction Act (IRA), just as those tax breaks were running out and automakers were in a race to retool their plants and start making electric cars. The full $7,500 tax credit can only be used on 14 different types of cars. On January 1, 2024, there were only four cars left on the list. The IRA has stricter rules than previous incentives, which were only bound by how much work was done. These cars must be made in the US, Canada, or Mexico, have a battery capacity of at least 7.0 kWh, a GVWR of less than 14,000 pounds, and be built by a manufacturer that is registered with the IRS and is known for their quality. Controlling prices and income is also very important. Four cars instead of fourteen The US Treasury also says that “critical minerals” worth at least 40% of the value of a battery must be extracted or processed in the United States or a country could be recycled in North America, with which the United States of America has a free trade agreement. One can receive a tax of $3,750 if they purchase a vehicle that satisfies the conditions of 40% credit. If an automobile meets the 50% mark, it can get an extra $3750 credit, for a total of $7500. As recently as 18 months ago, 14 EVs could get the full $7,500 credit. Many of them came in a number of different trim levels that were reasonable. Because of new rules, the number has already been cut to four cars in production (six, if you count the Chevy Bolt twins that were taken off the market in 2023). Right now, the Ford F-150 Lightning, the Tesla Model 3, the Tesla Model X, and the Tesla Model Y are the only cars that qualify. Still, that list might get longer in the next few weeks. Reuters says that VW is currently checking to see if the 2023 and 2024 ID.4 are valid. The same study backs up Nissan’s efforts to get Leaf approval. GM thinks that its lineup will be added if the source changes, though. Until the cars are cleared, GM will give customers a $7,500 discount.
