This week, a revised definition of vehicle classification from the U.S. Treasury Department means that consumers now have even more electric vehicle options to choose from when taking advantage of federal tax credits available under The Inflation Reduction Act.
Exciting additions include: GM's Cadillac Lyric, Ford Mustang Mach-E and Tesla Model Y – giving drivers increased access to these vehicles provided they stay below the price cap up to $80K for SUV models (with car/sedan/wagon price cap at $55K).
In August 2022, the Inflation Reduction Act of 2022 was signed into law and ushered in a new era for electric vehicles - The Clean Vehicle Credit. This credit replaces IRC 30D to offer up to $4,000 in tax credits on used EVs as well as introducing other clean vehicle options such as fuel cell vehicles onto the market with a maximum rebate of $7,500.
The EV tax credit can provide a great opportunity for certain buyers to save money - but there's more to the equation than just that. Income, price and production origin all play into eligibility for this incentive - with electric SUVs falling under the $80K cap.
With consumers in mind, the U.S. Treasury recently upgraded standards for determining eligibility of vehicles under price caps. By leveraging EPA Fuel Economy Labeling rather than CAFE standard, crossover models with similar features will now be treated consistently and align classifications on vehicle labels with those seen at consumer-facing sites like FuelEconomy.gov
Drivers now have the opportunity to reduce their cost of entry on several well-known and highly sought after electric vehicle models. The Cadillac Lyric starts at $62,990 while Ford Mustang Mach-E trims range from $45,995 up to $63k. Tesla's five seater Model Y will also now be eligible to take advantage of the Federal Tax Credit. Previously it was classified as a car and was not eligible.
With these new definitions in place, an even wider range of people will now be able to reap the benefits of federal tax credits when choosing to purchase an electric vehicle. The options have increased for consumers, giving them more leeway when it comes to finding a car that meets their needs. What do you think? Leave a comment below!
Source: US Department of the Treasury