If ordered soon, the Model Year 2023 X5 45e should have little trouble receiving the full $7500 federal tax credit.
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Hello, based on my interpretation of the bill’s text, used EVs are NOT subject to the stringent battery and manufacturing criteria. However, there are currently relatively few possibilities because to the $25,000 price cap. Maybe secondhand Nissan Leafs, Chevy Bolts, and a few more vehicles might be acceptable.
My order for a BMW X5 45e is scheduled for manufacture the following month. You indicate that BMW PHEVs don’t qualify, but since the X5 is made in North Carolina and I’ll probably take delivery in early October, I think that I would still be eligible for this year’s tax credit based on these criteria. Do I have the right idea or am I missing something?
Bob, I appreciate you bringing this up. The batteries and the X5 PHEV are both made in South Carolina. I love that! You should be eligible for at least $3,750 as long as the price stays below the $80,000 threshold. The source of BMW’s battery minerals is unknown, and the increased battery mineral requirement can affect a customer’s eligibility for the remaining $3,750. I’ll fix that right now.
Hello, I have a Model Y LR that will cost $63,000 and might be delivered in November or December 2022. From what I understand, the $2,000,000 cap will be lifted as soon as the President signs the new law. which would imply that the tax credit should be immediately applied to the Model Y. Or am I reading this incorrectly?
SambucaX
I was considering purchasing an XDrive45e. It appears that the credit for this vehicle would be reduced under the BBB bill as it is currently being reviewed by the senate. The lower income criteria to receive the full credit is in addition to this.
“The base amount stays at $4,000 as it is today, with an additional $3,500 being made available if the electric vehicle’s battery pack has a minimum capacity of 40 kilowatt hours. The gas tank of plug-in hybrids is limited to 2.5 gallons.”
I concur with Mak1105: I placed my order for an X5 45 e on September 21 and have been concerned about receiving it in 2021. The year 2022 has been set aside for production!
To MightyHawk’s point, nothing is certain because the Senate hasn’t yet passed the new House measure (I thought they were going to vote on it yesterday, the 10th).
I’m only certain that my X5 45e will be eligible for the entire $7,500 incentive under the current regulations if I can take delivery of the vehicle by 12/31/21.
It appears that I would lose $3,500 under the House plan if the delivery is put off until 2022. Due to the 24kWh battery’s inability to reach the 40KWH minimum requirement necessary to qualify for the full $7,500 incentive, the X5 45e will only be eligible for the base $4,000 credit. I haven’t yet determined whether the battery was made in the US and whether it would be eligible for an extra $500.
The Small Print.
New price ceilings will continue to apply to all the vehicles on both of these lists: The ceiling for SUVs, pickup trucks, and vans is $80,000 per vehicle. The credit cap for sedans, hatchbacks, wagons, and other cars is $55,000.
In other words, despite being on the Department of Energy’s original list, the Tesla Model S, Model X, and GMC Hummer are probably not eligible.
The IRS’s classification of specific vehicles is still up in the air. For example, because their costs are above $55,000, the Cadillac Lyriq and Tesla Model Y would qualify only if they are categorized as SUVs and not station wagons. Additionally, some vehicles might only be eligible if purchasers refrain from adding options that would raise the price above $80,000.
To receive the entire tax credit, each of these vehicles will still need to achieve the two aforementioned targets for battery production, albeit we are not yet certain which ones will.
The location of the vehicle’s assembly and the sources of its parts are listed on each window sticker. The distinctive Vehicle Identification Number (VIN) can be used to locate this information if you are purchasing online. (The VIN is printed on the window sticker and also on a plate that can be seen from the exterior of the automobile on the driver’s side of the windshield.)
Before purchasing an EV, you should use the free VIN Decoder provided by the National Highway Traffic Safety Administration to determine where the vehicle was manufactured.
A transition time for vehicles purchased before the bill was approved on August 16 had always been a part of the legislation. The transition period’s terminology, however, was so ambiguous that customers who had ordered cars were uncertain if they would be covered. Prior to today, Fisker, Lucid, and Rivian were among the automakers who believed that the transition rule applied to consumers who turned their existing reservations into “written binding contracts,” but other companies CR spoke to believed that preorders or reservations might not qualify. Some car buyers informed us that they received contradictory or insufficient information from the dealerships they dealt with.
Now that the IRS has provided some clarification, buyers who entered into a contract to buy an electric vehicle before August 16 but have not yet taken ownership of the vehicle may claim the credit in accordance with the regulations that were in force before August 16, 2022.
Here is what the IRS has to say right now:
“Persons who entered into a written, legally binding contract to purchase a new, qualified electric vehicle before August 16, 2022, but who do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), may claim the EV credit based on the rules that were in place prior to the enactment of the Inflation Reduction Act.”
So long as the manufacturer hasn’t sold more than 200,000 qualifying vehicles, they can receive a federal tax credit of up to $7,500. Tesla and GM are therefore not eligible for tax credits. If you did enter into a legally enforceable written agreement, we advise that you see a tax expert.
Does BMW qualify for the EV tax credit?
You automatically qualify for the $7,500 EV Federal Tax Credit when you buy a 2021 BMW 330e car, leaving you with a $1,000 tax bill balance.
Can the BMW i4 receive a federal tax credit?
Which discounts is the i4 eligible for? In addition to various state incentives like rebates, tax credits, and grants, owning the first-ever BMW i4 may entitle you to a federal tax credit of up to $7,500.
Does the plug-in hybrid Honda Clarity qualify for a tax credit?
The Honda Clarity Plug-In Hybrid can save you money on gas and qualify for a federal tax credit of up to $7,500.
Who can receive an EV tax credit?
- A tax credit of up to $7,500 will be given to new electric and fuel-cell automobiles. Some plug-in hybrid cars will still be eligible.
- Only automobiles with a price below a particular threshold will be accepted. The ceiling for SUVs, pickup trucks, and vans is $80,000 per vehicle. The credit cap for sedans, hatchbacks, wagons, and other cars is $55,000. (Learn more about reasonably priced EVs.)
- There won’t be a cap on the volume of credit-eligible automobiles that an automaker can sell.
- Unlike in previous years, a complex set of computations based on where the vehicles are produced and where the components that make up their batteries are purchased will determine the precise amount of the new tax credit. Through 2026, these criteria will be tightened yearly. By the end of December, the measure requires proposed regulations outlining these criteria, which will likely be adopted sometime in 2023.
- The only automobiles that qualify for a tax credit are those built in North America.
- Vehicles having parts from “foreign entities of concern,” such as China and Russia, will be excluded as of December 31, 2023.
- Dealerships will be permitted to provide customers with the value of a tax credit up front beginning in 2024. For car buyers, this might make the process easier.
- Buyers of cars must fit specific financial requirements. Although heads of household must earn less than $225,000 and individual filers can only qualify with income under $150,000, households with an adjusted gross income up to $300,000 will still be eligible for the benefit.
- For the first time, purchasers of used EVs will be eligible for a tax credit of $4,000 or 30% of the vehicle’s sale price, whichever is lower, but only if they purchase the vehicle from a dealership.
- For buyers of used EVs, the income requirement is lower: $150,000 for joint filers, $112,500 for the head of family, or $75,000 for an individual.
- Bidirectional EV chargers, or those that can charge your car and power your home simultaneously, are now qualified for tax breaks.
Although I adore quirky, vintage European sedans like the Renault Medallion, it is my passion to assist people in finding a car that is safe, dependable, and still makes them smile—even when they’re caught in traffic. You can usually find me planning my next vacation or exploring a new city on foot when I’m not behind the vehicle or at the computer.
Is there a tax credit for the hybrid RAV4?
The $7500 tax credit offered by the US government for the Toyota RAV4 Prime will end in the coming weeks. As a result, many consumers who are waiting for their RAV4 Prime have said they would cancel.
It’s simpler to shake the president’s hand than it is to buy a RAV4 Prime in a month, according to a meme I recently came across online. It pains me to tell you this, but it’s true. We have frequently discussed the absurdly large wait periods for the RAV4 Prime and the reasons why they are so long. Some Canadians had to wait three to five years simply to get a base-model RAV4 Prime, so you can imagine how long it truly takes. They will fortunately receive the appropriate model year rather than a 2022.
However, this forces many people to make a difficult choice. People on the list continue to use the EV tax credit while the US government gradually phases it out, though? Given the current global gas crisis, it is surprising that 53% of those who participated in the poll answered “no.”
Paul Prose posed the question, “Since it appears like the Federal tax credit is going away this week, in reference to our autos, and you are on a waiting list, will you still buy the car?” on Facebook’s Official Toyota RAV4 Prime group. He included an interactive poll beneath that query. For the purpose of argument, I’ll only use the top poll answer, which was a yes or no question. There were about 4 other answers added in by people who couldn’t respond to a yes or no question.
Surprisingly, 53% of those surveyed responded that they would not carry out their order. Therefore, if their deposit was non-refundable, as most of them are, they are not in the red and are actively looking for a new vehicle.
“I probably would have chosen the standard hybrid,” John Kotseas stated. He added that the cost was a factor. That, in my opinion, is illogical. Due to the money you would save on gas if you purchased the Prime, the price difference would be made up within a few years.
The more people who understand that PHEVs are preferable to hybrid or electric vehicles, in my opinion, the more likely this economy will recover. The amount of jobs and businesses that would be lost if we made the conversion to electric vehicles overnight would be enormous. Finding better energy solutions that benefit rather than harm businesses is the moral thing to do.