August 23, 2022
New U.S. Law Makes Eligibility for EV Tax Credits More Restrictive
In Automotive Fleet’s 109th video episode of State of the Fleet Industry, gain insight into the state of the fleet market as presented by AF Editor Mike Antich.
- The Inflation Reduction Act of 2022, signed into law by President Biden on Aug. 16, 2022, creates a new set of rules on the issuance of tax credits to purchase new and used EVs.
- People familiar with the new EV credit eligibility requirements describe them as confusing with harder-to-meet criteria.
- To be eligible, an EV must be built in North America, most battery components must be assembled in North America, and battery materials can only be sourced from countries that have a free trade agreement with the U.S.
- The Inflation Reduction Act will actually reduce the number of EVs eligible for the tax credits from 72 models down to only 22 models. The number will further increase when the battery sourcing requirements become effective on Jan. 1, 2023.
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⌚ Timestamps ⌚
0:54 Fastest Housing Market Contraction Since 2006
1:54 Impact of Inflation Reduction Act of 2022
2:52 New EV Tax Credit Requirements
3:20 Complaints that Law is Confusing & More Restrictive
4:06 EV Must be Assembled in North America
4:35 Sourcing Only with Free Trade Agreement Countries
5:24 Most Battery Assembly Must Be in North America
5:36 Law Reduces Number of Eligible EVs
6:46 Tax Credit Expanded to Fuel-Cell Vehicles
7:17 Does Law Have Unintended Consequences?
8:20 IRS Issues Preliminary Guidance