Connect with us

Hi, what are you looking for?

Business

Department of Treasury Offers Federal Tax Credit of Up to $7,500 for Buying Electric Vehicle

Buying electric vehicles will get a chance to earn up to $7,500 credit
Up to $7,500 is offered for those who buy electric vehicles (Photo: Electric)

Suppose you’ve been looking for an electric vehicle. In that case, 2023 could be your lucky year, as the United States Department of Treasury expanded the list of vehicles eligible for a federal tax credit of up to $7,500. The credit is one of the provisions of the Inflation Reduction Act, which is intended to boost EV sales while lowering greenhouse gas emissions in the long run.

Up to $7,500 credit is available if you buy an eligible electric vehicle. (Photo: The Third Pole)

Up to $7,500 credit is available if you buy an eligible electric vehicle. (Photo: The Third Pole)

People who buy new electric vehicles, plug-in gas-electric hybrids, and hydrogen fuel cell vehicles are eligible for a credit of up to $7,500. While a $4,000 credit will be available for those who buy a used car that runs on battery power.

However, the requirements to qualify for credit will remain uncertain until the Department of Treasury issues the proposed rules in March. What’s known so far is that several complicated provisions are laid out for the battery components. Forty percent of battery components must come from North America, recycled in North America, or from a country with a U.S. free trade agreement. And 50% of the battery parts must be assembled in North America.

According to NBC Bay Area, starting in 2024, battery minerals outsourced from China and Russia will be deemed a “foreign entity of concern.” This strategy poses an obstacle for the auto industry as China produces numerous EV metals and parts.

The eligibility of the vehicle brand and its model remains uncertain. However, the department released the initial list of vehicles that meet their standard, including Chrysler, Ford, Jeep, Lincoln, Nissan, and Rivian. More vehicles are expected to be added to the list. For more details, check out the NBC Bay Area website for the initial list of vehicles.