Secure Savings Now - Understand the Federal Tax Credits on EV Purchases Before They Change
It is true that Lucid has opened up reservations for its closer to $100k model in order to protect customer tax credits. This is a great way to ensure customers can still benefit from the existing federal tax credit rules before they are revised. BMW Corporate, however, has not offered any guidance to its dealers on this matter, which is quite surprising.
The US Inflation Reduction Act (IRA) will potentially affect the tax credit for new EV purchases for US buyers. The IRA eliminates the tax credit for EVs costing more than $80k base, or for individuals above a certain income, or for EVs whose parts are sourced from other than the US, essentially starting in 2023. However, the provision that the vehicle is built in the US goes into effect immediately once the bill is signed. This means that any iX purchased after 13 August 2022 will not get the tax credit.
Fortunately, EV’s purchased by Dec 2022 as well as those ordered by the end of this year, will NOT be affected by the new bill. As long as EV delivery or orders are made by the end of year 2022, the existing rules still apply. It is important to note that a signed purchase order or agreement before Biden signs the bill (i.e., this week) and then have to wait for delivery of an EV assembled outside of North America, you can still qualify for the current credit.
In addition, if you buy an EV assembled outside of North America after the bill is enacted but before the end of the year, you may not get the current credit as the final assembly requirement goes into effect at enactment, but the mineral and battery materials requirements go into effect next year. Therefore, it is wise to try and get a signed purchase agreement before the bill is signed (i.e., this week).
Overall, it is clear that there are many varying narratives out there on whether the existing federal tax credits get revised now or starting in 2023. It is important to keep up with news and articles related to this topic so that you can make sure you are taking advantage of all available incentives and rules before they change.
It is also important to note that the EV tax credit will still be available for those who purchase EVs before the end of 2022, regardless of where they are assembled. This means that if you are looking to buy an EV this year, you should do so as soon as possible in order to take advantage of the current tax credit rules.
Finally, it is important to remember that the IRA does not change the existing state and local incentives for EVs. These incentives are still available and can help reduce the cost of purchasing an EV even further. Therefore, it is wise to research all available incentives before making a purchase decision.
In conclusion, Lucid’s move to open up reservations for its closer to $100k model is a great way to ensure customers can still benefit from the existing federal tax credit rules before they are revised. It is important to keep up with news and articles related to this topic so that you can make sure you are taking advantage of all available incentives and rules before they change. Additionally, it is wise to research all available state and local incentives before making a purchase decision.
How will the Inflation Reduction Act affect EV tax credits?
The Inflation Reduction Act eliminates the tax credit for EVs costing more than $80k base, or for individuals above a certain income, or for EVs whose parts are sourced from other than the US, starting in 2023. However, the provision that the vehicle is built in the US goes into effect immediately once the bill is signed (13 August 2022). Any iX purchased after this date will not get the tax credit.
Will EV’s purchased by Dec 2022 be affected by the new bill?
No. As long as EV delivery or orders are made by the end of year 2022, the existing rules still apply. If you have a signed purchase order or sign one before Biden signs the bill (i.e., this week) and then have to wait for delivery of an EV assembled outside of North America, you can still qualify for the current credit.
What should I do if I want to get the tax credit?
See if you can get a signed purchase agreement before the bill is signed (i.e., this week). Lucid has opened up reservations for its closer to $100k model in order to protect customer tax credits. Apparently a reservation/pre-order is enough. If you are looking for an EV that costs more than $80k, then you should consider purchasing one before the bill is signed.
What other options do I have?
If you are looking for an EV that costs less than $80k, then you can wait until after the bill is signed and still qualify for the tax credit. You could also look into leasing an EV or buying a used one. Leasing an EV will allow you to get the tax credit as long as you make sure to sign the lease agreement before the bill is signed. Buying a used EV will also allow you to get the tax credit if it was purchased before the bill was signed.
Are there any other incentives for buying an EV?
Yes, there are many other incentives for buying an EV. Depending on where you live, you may be eligible for state or local tax credits and rebates. Additionally, some states offer free charging stations and access to HOV lanes. You can also save money on fuel costs since electric vehicles are much more efficient than gasoline-powered cars. Finally, many employers offer discounts on EVs as part of their employee benefits packages.