The Inflation Reduction Act that just passed the Senate is supposed to be great news for EVs … but what if ZERO cars qualify?
It might be a hot take, but Omar Qazi isn’t shy when it comes to that kind of thing. His “Whole Mars Blog” Twitter feed is full of stuff that challenges conventional thinking – but, when it comes to the recently passed bill that supposedly expands EV tax credits and rebates to thousands more electric cars, big trucks, and more, he may be on to something.
Here’s the original tweet we’ll be discussing over the next few paragraphs – included here so you know we’re not the ones making it up.
Let's be very clear about what the Senate did today: They killed the EV tax credit.— Whole Mars Catalog (@WholeMarsBlog) August 7, 2022
EVs were gaining way too much momentum. Tesla's success is starting to scare legacy auto. So the fossil fuel & dealership lobby repealed the credit & replaced with a handout for themselves.
What does he mean? On the surface, the new bill expands the $7,500 EV tax credit to more electric cars – and not just the Tesla, GM, and Toyota models that had been disqualified under the previous model. Used electric cars would be getting incentives, too. And big trucks? They could see up to $40,000 price reductions under the new law.
But, as we mentioned yesterday, there’s a catch: in order for EV buyers to benefit from the full tax credit, the vehicles they buy will have to be built in North America, and so will their batteries.
There are other catches, too. The vehicle can’t cost more than $80,000 being the one getting the most press – but there are income limits, as well. Make too much, and you won’t qualify for the handout, either (which, arguably, is a positive change to the tax code).
So, once you eliminate the electric cars that are too expensive, and the ones that aren’t built in North America, what cars are left? To answer that question, we turn to our good friend, Loren McDonald, over at EVAdoption.com.
EVs That Qualify For the Full, $7,500 Tax Credit in 2023*
If you’re surprised by how short that list is – indeed, there are no electric or plug-in cars from Audi, BMW, Chrysler, Hyundai, Kia, Jaguar, Mercedes-Benz, Mini, Nissan, Polestar, or Volvo on that list – hold on, because it’s about to get even shorter.
None of These EVs Would Make the Cut
That asterisk (*) up there, above the list of qualifying EVs? That doesn’t consider the caveat of domestic battery composition. “So while we don’t yet have a definitive answer [from the OEMs],” writes McDonald, “it appears that of the roughly 22 BEVs and PHEVs that would otherwise qualify … perhaps just a few, or even zero would qualify for the revised federal EV tax credit.” (Emphasis ours.)
There’s a lot to unpack here, of course, and the final version of the bill still hasn’t made it through Congress or been signed into law by the President, so the language could change significantly between now and then. That said, before we start celebrating this “landmark” EV bill, we need to read the fine print.