Should you buy now or after tax credit changes?
DETROIT — Consumers who can find an electric vehicle or plug-in hybrid that qualifies for the $7,500 tax credit now may want to snap it up before the end of the year, experts say, while others wanting to purchase EVs that aren’t eligible might be better off waiting until 2023.
Qualification requirements change in January following passage of legislation known as the Inflation Reduction Act. It will replace today’s $7,500 tax credit available on all-electric and plug-in hybrid purchases from automakers that have sold fewer than 200,000 vehicles.
The new rules remove that sales cap and still offer up to a $7,500 tax credit on EVs and PHEVs. Vehicles, however, must be assembled in North America and must then meet critical battery mineral and battery components manufacturing requirements to get the full amount. Not all will next year. The new rules also have income and vehicle price maximums.
The industry is awaiting more guidance from the Treasury Department before the end of the year to determine which exact models will qualify as global automakers quicken their pivot to electric vehicles.
General Motors Co. stands to benefit the most among the Detroit Three since its electric vehicles like the Chevrolet Bolt don’t qualify for the current subsidy after the company hit its cap in 2019, the second automaker after Tesla Inc. to do so. Ford Motor Co. and Stellantis NV say their vehicles are eligible for the existing tax credit through the end of the year.
“For consumers who are looking for a vehicle that qualifies for the credit now, by all means, if you can get a hold of the vehicle, buy it,” said Chris Harto, senior policy analyst for transportation and energy at Consumer Reports.