The U.S. Department of Energy and the Internal Revenue Service have issued guidance on the effects of the new EV tax credit rules contained in the Inflation Reduction Act of 2022. Some provisions of the new law took effect immediately upon President Biden's signature, but many vehicles are still eligible for the existing EV tax credits through the end of the year, even though the same tax credits may not be available in 2023.
As of right now, electric and plug-in hybrid vehicles that are made in North America are still eligible for credits. The IRS has published rules to determine if a given vehicle qualifies for the tax credit between today and the end of 2022.
The first immediate requirement is that any tax-credited vehicle must undergo final assembly in North America. Other rules, including the requirements for battery mineral and component sourcing in North America or free-trade nations, don't take effect until Jan. 1, 2023.
Among the electric vehicles eligible for tax credit before the end of 2022 are the Rivian, Lucid, Ford, and Nissan offerings, and the 2023 Volkswagen ID.4, which is made in Chattanooga, Tennessee.
One critical limitation remains for 2022. The manufacturer sales cap that now excludes certain vehicles from the tax credit is still in place through the end of 2022. That means that GM and Tesla EVs still no longer qualify for a tax credit because they have sold more than their allotment of EVs.
The Department of Energy has created a list of Electric Vehicles Assembled in North America because some vehicles are assembled in multiple locations. Both the IRS and Dept. of Energy recommend that consumers use the to determine the exact manufacturing facility of any potential tax creditable vehicle.
In addition to the new Federal rules, Oregon still offers substantial tax credits for EVs and PHEVs. The Oregon Department of Environmental Quality's Oregon Clean Vehicle and Charge Ahead Rebate programs offer all Oregonians up to $2,500 for the purchase or lease of a qualifying new vehicle. Low- and moderate-income Oregonians are eligible for an additional $5,000 on qualifying new or used EVs. You can access the full rule set and download an application at
As always, it is up to the taxpayer to perform their due diligence to see if a vehicle qualifies for the tax credit. The dealer is a helpful resource, but be sure to check it out thoroughly if you are depending on the tax credit.
