Photo: EVGo
It's really hard to digest the enacting of legislation that effectively kills the momentum that has taken place in the electrification of the automobile over the last couple of years. The same financial incentives that were yanked yesterday in the U.S. were significant drivers of increased demand for EVs.
The legislation manufacturers lambasted when the bill was introduced became a reality when it was signed into law yesterday (August 16). The Inflation Reduction Act of 2022 amends the qualifications of the Qualified Plug-in Electric Drive Motor Vehicle credit, now known as the Clean Vehicle Credit.
The law, which takes effect immediately, abolishes the $7,500 (7,370 euros) credit on 70% of the 72 electric vehicles that were eligible prior to the new legislation.
The law is aimed directly at the foreheads of manufacturers to entice them to manufacture EVs in North America. Those that are North American-made will still qualify for the credit this year but will become ineligible when a manufacturer has sold 200,000 cars, as Tesla and General Motors have done.
Electric vehicles manufactured by Porsche, Toyota, and Kia are now ineligible under the new law.
Another arm of the legislation takes effect on January 1, 2023 that places additional new barriers on battery and mineral sourcing in addition to price and income caps rendering nearly all electric vehicles ineligible. The exact details of that are to be defined at a later date.
Buyers who entered into binding contracts before the law was signed on Tuesday are still eligible for the full credit. According to the IRS, a binding contract is defined as placing a non-refundable deposit on a vehicle sales contract or paying a 5% down payment on an electric vehicle. After the bill passed the house last week, both Rivian and Fisker were among many manufacturers that implored customers to enter into such contracts.
The law does not affect 21 electric vehicle models through the end of 2022. A list of those models still eligible can be found by going to the U.S. Department of Energy website.
The law, which takes effect immediately, abolishes the $7,500 (7,370 euros) credit on 70% of the 72 electric vehicles that were eligible prior to the new legislation.
The law is aimed directly at the foreheads of manufacturers to entice them to manufacture EVs in North America. Those that are North American-made will still qualify for the credit this year but will become ineligible when a manufacturer has sold 200,000 cars, as Tesla and General Motors have done.
Electric vehicles manufactured by Porsche, Toyota, and Kia are now ineligible under the new law.
Another arm of the legislation takes effect on January 1, 2023 that places additional new barriers on battery and mineral sourcing in addition to price and income caps rendering nearly all electric vehicles ineligible. The exact details of that are to be defined at a later date.
Buyers who entered into binding contracts before the law was signed on Tuesday are still eligible for the full credit. According to the IRS, a binding contract is defined as placing a non-refundable deposit on a vehicle sales contract or paying a 5% down payment on an electric vehicle. After the bill passed the house last week, both Rivian and Fisker were among many manufacturers that implored customers to enter into such contracts.
The law does not affect 21 electric vehicle models through the end of 2022. A list of those models still eligible can be found by going to the U.S. Department of Energy website.
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