The federal tax credits for electric vehicles, which have been a cause of confusion for automakers and car shoppers alike for months, are about to go through another big change.
It’s all because of battery sourcing requirements that are kicking in.
The new rules, which were announced last month, require a certain percentage of battery minerals and components be sourced from North America or a U.S. trade partner. They are meant to incentivize U.S.-based production and were a part of the massive climate bill that revamped the tax credit for electric cars.
The IRS on Tuesday released an updated list of cars that will qualify under the new battery guidelines on FuelEconomy.gov. It goes into effect on Tuesday.
Overall, General Motors and other U.S. auto makers stand to benefit the most from the revamped rules.
Several of the most popular models — like the Tesla Model Y and Chevy Bolt — will still get the full $7,500.
But starting Tuesday, a half a dozen models will get a $3,750 credit instead, and vehicles including the VW ID.4, Nissan Leaf and Rivians will lose the credit altogether.
Here’s what to know.
Full tax credit
After Tuesday, fewer vehicles will be eligible for $7,500.
The $7,500 tax credit is actually two separate credits, worth $3,750 each. Right now every qualifying vehicle gets both credits, but starting April 18, vehicles could end up qualifying for neither, one, or both.
The IRS says the following vehicles will still be eligible for both tax credits, worth $7,500:
- Cadillac Lyriq
- Chevy Silverado EV
- Chevy Bolt
- Chevy Bolt EUV
- Chrysler Pacifica PHEV
- Ford F-150 Lightning
- Lincoln Aviator Grand Touring plug-in hybrid
- Tesla Model Y (AWD, Long Range…
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