The U.S. Government Recently Signed New Legislation Into Law Which Has a Direct Impact on Vehicle Sales Specifically Part of the Inflation Reduction Act Involves Updates and Changes to the Incentive System for Electric or Electrified Vehicles.
As of today, about 19 vehicles qualify for a federal tax credit this includes full battery electric vehicles and a handful of plug-in hybrids. However, the number is set to fluctuate based on new rules and requirements and honestly it's still a little confusing and murky what we do know though is that future adjustments to eligible vehicles and income requirements are going to change how it all shakes out. More importantly, what was a $7,500 rebate you could put towards your federal taxes should finally become an actual discount at the time of vehicle purchase that's a huge change and a helpful one too with respect to how people view pricing on electric vehicles.
Additionally, there was or technically still is a sales cap for automakers to be able to offer that tax rebate once an automaker hit 200,000 sales of EVs it was no longer eligible starting on January 1st, 2023 however that cap has been lifted. There are income caps though so be mindful of that for individuals the max adjusted gross income allowed under the program is $150,000 if you're the individual head of a household the cap rises to $225,000 and those filing jointly max out at $300 grand. Must be nice beyond income caps the vehicle price also has a cap for incentive qualification honestly that makes a ton of sense if the goal is an increase in the ability to purchase relatively affordable electric vehicles you don't need to offer a slight discount on a $250,000 lucid air.
The vehicle price cap lands at $55,000 for cars and rises to $80,000 for trucks and suvs this may be more difficult for automakers to hit initially however as the current average transaction price of an electric vehicle is $66,000 and are we counting crossovers as suvs or cars it gets tougher though at least for the automakers from an assembly and manufacturing standpoint only vehicles assembled in north america will qualify going forward that's not that tricky since automakers often assemble a ton of vehicles here in the states even if major components and construction happen elsewhere it's the final assembly point that's important with respect to the incentives.
The tougher part relates to where the batteries are built the government will require that automakers obtain forty percent of critical battery components from the us or one of its major trade partners then a year later on January 1st, 2024 that number rises to 50. The eventual goal is to bring it all the way up to 80 by 2026 as it sits now not one ev meets the 40 requirement so that's gonna be a tough bit of legislation to dance around and we suspect there will be modifications to get the ball rolling at least.
The current list of vehicles eligible for the incentives in 2022 range from audi and bmw products to ford lincoln jeeps and more the rivian siblings are on the list too. And as for 2023 models the department of energy shows the bmw 3-series plug-in hybrid mercedes eqs and nissan leaf is eligible but more are set to come back with the removal of the volume cap and this includes the chevy bolt ev and euv tesla model y and the standard range version of the tesla model 3. Also, the lyric from cadillac pops on the list as well.
So to recap because there's a lot of information this move should help or force automakers to offer up better ev pricing customers under the income caps should get a more practical discount at the time of an ev purchase and the automakers need to find a way to produce more battery parts here and make sure the vehicles are assembled here as well. There's a lot of challenges in there but there's also a lot of potential good as well does any of this make you more interested in looking at an ev for purchase or are you still scratching your head over all of this
"WEBVTTKind: captionsLanguage: enthe u.s government recently signed new legislation into law which has a direct impact on vehicle sales specifically part of the inflation reduction act involves updates and changes to the incentive system for electric or electrified vehicles so what's changed which vehicles qualify and how might this affect you let's take a look see what's going on first as of today about 19 vehicles qualify for a federal tax credit this includes full battery electric vehicles and a handful of plug-in hybrids but the number is set to fluctuate based on new rules and requirements and honestly it's still a little confusing and murky what we do know though is that future adjustments to eligible vehicles and income requirements are going to change how it all shakes out and more importantly what was a 7 500 rebate you could put towards your federal taxes should finally become an actual discount at the time of vehicle purchase that's a huge change and a helpful one too with respect to how people view pricing on electric vehicles additionally there was or technically still is a sales cap for automakers to be able to offer that tax rebate once an automaker hit 200 000 sales of evs it was no longer eligible starting on january 1st 2023 however that cap has been lifted there are income caps though so be mindful of that for individuals the max adjusted gross income allowed under the program is 150 000 if you're the individual head of a household the cap rises to 225 000 and those filing jointly max out at 300 grand must be nice beyond income caps the vehicle price also has a cap for incentive qualification and honestly that makes a ton of sense if the goal is an increase in the ability to purchase relatively affordable electric vehicles you don't need to offer a slight discount on a 250 000 lucid air the vehicle price cap lands at 55 000 for cars and rises to 80 000 for trucks and suvs this may be more difficult for automakers to hit initially however as the current average transaction price of an electric vehicle is 66 000 and are we counting crossovers as suvs or cars it gets tougher though at least for the automakers from an assembly and manufacturing standpoint only vehicles assembled in north america will qualify going forward that's not that tricky since automakers often assemble a ton of vehicles here in the states even if major components and construction happen elsewhere it's the final assembly point that's important with respect to the incentives the tougher part relates to where the batteries are built the government will require that automakers obtain forty percent of critical battery components from the us or one of its major trade partners then a year later on january 1st 2024 that number rises to 50 the eventual goal is to bring it all the way up to 80 by 2026 as it sits now not one ev meets the 40 requirement so that's gonna be a tough bit of legislation to dance around and we suspect there will be modifications to get the ball rolling at least the current list of vehicles eligible for the incentives in 2022 range from audi and bmw products to ford lincoln jeeps and more the rivian siblings are on the list too and as for 2023 models the department of energy shows the bmw 3-series plug-in hybrid mercedes eqs and nissan leaf is eligible but more are set to come back with the removal of the volume cap and this includes the chevy bolt ev and euv tesla model y and the standard range version of the tesla model 3. also the lyric from cadillac pops on the list as well so to recap because there's a lot of information this move should help or force automakers to offer up better ev pricing customers under the income caps should get a more practical discount at the time of an ev purchase and the automakers need to find a way to produce more battery parts here and make sure the vehicles are assembled here as well there's a lot of challenges in there but there's also a lot of potential good as well does any of this make you more interested in looking at an ev for purchase or are you still scratching your head over all of thisthe u.s government recently signed new legislation into law which has a direct impact on vehicle sales specifically part of the inflation reduction act involves updates and changes to the incentive system for electric or electrified vehicles so what's changed which vehicles qualify and how might this affect you let's take a look see what's going on first as of today about 19 vehicles qualify for a federal tax credit this includes full battery electric vehicles and a handful of plug-in hybrids but the number is set to fluctuate based on new rules and requirements and honestly it's still a little confusing and murky what we do know though is that future adjustments to eligible vehicles and income requirements are going to change how it all shakes out and more importantly what was a 7 500 rebate you could put towards your federal taxes should finally become an actual discount at the time of vehicle purchase that's a huge change and a helpful one too with respect to how people view pricing on electric vehicles additionally there was or technically still is a sales cap for automakers to be able to offer that tax rebate once an automaker hit 200 000 sales of evs it was no longer eligible starting on january 1st 2023 however that cap has been lifted there are income caps though so be mindful of that for individuals the max adjusted gross income allowed under the program is 150 000 if you're the individual head of a household the cap rises to 225 000 and those filing jointly max out at 300 grand must be nice beyond income caps the vehicle price also has a cap for incentive qualification and honestly that makes a ton of sense if the goal is an increase in the ability to purchase relatively affordable electric vehicles you don't need to offer a slight discount on a 250 000 lucid air the vehicle price cap lands at 55 000 for cars and rises to 80 000 for trucks and suvs this may be more difficult for automakers to hit initially however as the current average transaction price of an electric vehicle is 66 000 and are we counting crossovers as suvs or cars it gets tougher though at least for the automakers from an assembly and manufacturing standpoint only vehicles assembled in north america will qualify going forward that's not that tricky since automakers often assemble a ton of vehicles here in the states even if major components and construction happen elsewhere it's the final assembly point that's important with respect to the incentives the tougher part relates to where the batteries are built the government will require that automakers obtain forty percent of critical battery components from the us or one of its major trade partners then a year later on january 1st 2024 that number rises to 50 the eventual goal is to bring it all the way up to 80 by 2026 as it sits now not one ev meets the 40 requirement so that's gonna be a tough bit of legislation to dance around and we suspect there will be modifications to get the ball rolling at least the current list of vehicles eligible for the incentives in 2022 range from audi and bmw products to ford lincoln jeeps and more the rivian siblings are on the list too and as for 2023 models the department of energy shows the bmw 3-series plug-in hybrid mercedes eqs and nissan leaf is eligible but more are set to come back with the removal of the volume cap and this includes the chevy bolt ev and euv tesla model y and the standard range version of the tesla model 3. also the lyric from cadillac pops on the list as well so to recap because there's a lot of information this move should help or force automakers to offer up better ev pricing customers under the income caps should get a more practical discount at the time of an ev purchase and the automakers need to find a way to produce more battery parts here and make sure the vehicles are assembled here as well there's a lot of challenges in there but there's also a lot of potential good as well does any of this make you more interested in looking at an ev for purchase or are you still scratching your head over all of this\n"
