The U.S. Treasury has reported that several electric vehicles, including including the Nissan Leaf, Tesla Cybertruck All-Wheel Drive, and Chevrolet Blazer EV no longer qualify for tax credits of up to $7,500, following the implementation of new battery sourcing rules on Monday.
In December, the Treasury issued guidelines outlining updated requirements for battery sourcing, with the aim of reducing dependence on Chinese suppliers in the U.S. electric vehicle supply chain. As of Monday, the guidelines have come into effect, impacting the eligibility of various electric vehicle models for federal tax credits.
The number of electric vehicle models qualifying for U.S. tax credits has seen a significant reduction from 43 to 19, encompassing different versions of the same vehicle type. It is noted that some manufacturers are yet to submit information on eligible vehicles, potentially leading to adjustments in the list.
Under the new rules, buyers can claim tax credits of up to $7,500 directly at participating dealerships during the point of sale. The tax credit is subject to limits on vehicle price and buyer income to qualify.
Several prominent electric vehicles, such as the Volkswagen ID.4, Tesla Model 3 Rear Wheel Drive, BMW X5 xDrive50e, Audi Q5 PHEV 55, Cadillac Lyriq, and Ford E-Transit, are among those that no longer qualify for tax credits.
Volkswagen responded on Monday, stating that it is currently in the process of confirming eligibility for federal EV tax credits for its vehicles post-January 1. The company expressed optimism about the eligibility of its MY2023 and MY2024 ID.4 models under the new rules.
As the Treasury’s new guidelines reshape the landscape of electric vehicle tax incentives, manufacturers and buyers alike are navigating the evolving terrain of eligibility criteria and sourcing regulations.
