- What do the new tax credit rules mean for electric vehicles under the Inflation Reduction Act?
- The Chrysler Pacifica hybrid vehicle plug-in version is the only minivan qualified
- What other vehicles qualify for the new EV tax credit?
Due to the new tax credit structure brought about by the Inflation Reduction Act of 2022, many electric vehicles, hybrids, and PHEV models are no longer eligible for the credits. If you look into the new rules getting adopted by the IRS, only one minivan actually qualifies for the tax credits. The Chrysler Pacifica hybrid made the cut as an EV.
What provisions have changed with the new rules, and which electric vehicles will qualify?
2023 Chrysler Pacifica | Stellantis
What do the new tax credit rules mean for electric vehicles under the Inflation Reduction Act?
There are four key provisions to keep in mind when buying an EV under the new Inflation Reduction Act. First, we no longer have the 200,000 vehicles production cap that we previously had. Now, more can be manufactured, but other requirements must be met before you can claim the credit. Tesla, for example, can now be eligible, where they weren’t before.
According to Consumer Reports, the higher-priced electric vehicles are no longer qualified. The IRS considers cars, SUVs, and trucks under a certain MSRP cap. For cars, it’s $55,000 and for SUVs, vans, and trucks, it’s $80,000.
They will not consider high-priced discounted vehicles regardless of the other qualifications. So, an SUV with a price tag of $90,000 MSRP, for example, wouldn’t qualify if it was discounted to $75,000.
The location of a vehicle’s final assembly will be important. No vehicle that is assembled anywhere other than in North America, will be eligible. It can be manufactured elsewhere but shipped to the U.S. for final assembly, though. Beginning in 2024, any minerals or parts sourced from entities outside of North America will also not qualify.
The last provision deals with the buyer’s adjusted gross income cap. A single filer should not make more than $150,000, and a married couple filing jointly should not make more than $225,000 combined.
It’s also important to note that leased vehicles may still qualify for the credits regardless of the provisions given above. However, the credits go to the dealer of the leased vehicle, and they can choose whether they want to pass those savings on to the customer or not.
Today, Treasury updated vehicle classification information related to the Inflation Reduction Act’s clean vehicle tax credits. This change will make it easier for consumers to know which electric vehicles qualify and to claim these credits of up to $7,500. https://t.co/KDI8TsiBS9
— Treasury Department (@USTreasury) February 3, 2023
The Chrysler Pacifica hybrid vehicle plug-in version is the only minivan qualified
While there are plenty of SUVs, there’s only one minivan that will qualify under the new Inflation Reduction Act and that’s the Chrysler Pacifica PHEV. This vehicle is eligible because of where’s it assembled, and its MSRP is under the $80,000 cap.
Chrysler’s minivan has a 3.6-liter V6 engine paired with two electric motors generating a total of 260 hp and 236 lb-ft of torque. With this setup, you can expect the minivan to go from 0 to 60 mph in 7.3 seconds, which is actually pretty good for a family van.
As for fuel savings, the Pacifica offers an estimated 82 MPGe and can get you approximately 520 miles of range when you combine the gas and electric outputs. With the electric powertrain alone, you can expect 32 miles on a single charge.
Our @Chrysler Pacifica Hybrid so far is a solid minivan but a mediocre PHEV: https://t.co/a0ZLZ78BfH pic.twitter.com/rb1eNNFsUt
— Car and Driver (@CARandDRIVER) December 7, 2018 Related
What other vehicles qualify for the new EV tax credit?
The Chrysler Pacifica hybrid model plug-in version isn’t the only vehicle that’s eligible for the credits under the new climate bill. The Jeep Wrangler and the Grand Cherokee are also on the list of qualified vehicles. The plug-in versions for both are eligible due to the MSRP falling under the $80,000 range.
For the Nissan Leaf, the EV will qualify if you choose the S, S Plus, SL Plus, SV, and SV Plus hatchbacks due to their MSRP. Of course, that’s if the income limits aren’t exceeded with these trim levels. The Tesla Model 3 also qualifies, but with the rear-wheel drive, and the long-range sedans only.
The Lincoln Corsair also qualify, but the IRS categorized them as being cars, so these models will need to fall under the $55,000 range. For the Lincoln, Corsair’s Grand Touring PHEV would be eligible. Cadillac’s Lyriq is on the list, categorized as a car, but Consumer Reports states that the MSRP is above the $55,000 range, so it likely won’t be eligible.
The key provisions brought by the new Inflation Reduction Act shorten the list of electric vehicles that will qualify for the tax credits. With the new rules, if you’re looking to get an electric minivan, you’ll have to stick with the Chrysler Pacifica PHEV.
Keyword: Only 1 Minivan Is Eligible for an EV Tax Credit