- The Inflation Reduction Act passed last year introduced a MSRP cap for certain vehicle types and requires final assembly in North America to retain eligibility for a $7,500 tax credit.
- On Friday, the U.S. Treasury reclassified some cars into the “SUV” class, raising the available cap to receive the credit to $80,000.
- Five models that were classified as sedans (and subject to a lower $55,000 cap) are now defined as SUVs, creating a wider range of options to qualify for the $7,500 tax credit.
- The new decision takes effect immediately and works retroactively for vehicles purchased after January 1, 2023, but before today’s announcement.
Five more EVs are wholly eligible for the U.S. government’s $7,500 EV tax credit.
The Treasury Department announced Friday that it revised the list of electric cars eligible to receive the new credit created under last year’s Inflation Reduction Act. While the overarching provisions remain the same — vehicles must undergo final assembly in North America and have an MSRP no higher than $55,000 for sedans and $80,000 for trucks and SUVs — the Feds reclassified five models into the higher price bracket. In turn, that gives buyers some more options if they’re looking to take full advantage of government incentives for their EV purchase.
Acting on pressure from automakers, the Treasury decided to move five models into the higher-threshold SUV category:
The change revolves around the framework for sorting out vehicle eligibility by the EPA’s CAFE (Corporate Average Fuel Economy) standards. Now, the Treasury says it will classify vehicles using the EPA’s “Fuel Economy Labeling” standard, which is used to create consumer-facing labels. So, this change should reduce confusion and widen prospective choices for those shopping around for a new EV.
If you bought one of these EVs between January 1 and now, you’re still eligible
While this decision takes effect moving forward, it also retroactively applies to those who bought one of the five models listed above this year. According to Friday’s statement: “Customers who have purchased and placed in service vehicles since January 1, 2023, that qualify under the EPA Fuel Economy Labeling classification standard announced today and who satisfy the other clean vehicle tax credit requirements can claim the credit, including customers with vehicles that did not qualify under the prior EPA CAFE standard.”
Updated information including today’s change and the full list of currently eligible electric cars, by manufacturer, is available on IRS.gov.