Two Great EVs You Should Consider Buying Soon
If you are currently in the market for an electric vehicle, there is a good chance that the Ford Mustang Mach-E or the Chevy Bolt EUV are on your list of serious contenders. Both EV models are outstanding choices, and both are eligible for the full $7,500 federal tax credit, if you act quickly. Sometime in March, the Treasury Department will begin enforcing strict new rules on the sourcing of battery materials that are expected to reduce the value of the credit for the handful of EV models that remain eligible. Consumers have just a few weeks left to take full advantage of the valuable incentive, which has been available since 2009.
The unusual window of opportunity is due to the implementation of the Inflation Reduction Act, which made substantial changes to the rules governing the popular tax credit. EVs manufactured by General Motors and Tesla had become ineligible for the credit under the old rules, which included a sunset provision phasing out the value of the credit once a manufacturer sold 200,000 qualified vehicles. Many provisions of the newly revised Clean Vehicle Credit went into effect on the first day of 2023, including a repeal of the 200,000-vehicle sales cap. Another rule change has disqualified all EVs assembled outside of North America, but this draconian restriction does not apply to the Mach-E or the Bolt EUV. A small number of EV models remain eligible, but most of them will see the value of their credit drop to $3,750 or zero when the battery sourcing rules are implemented in March.
Another significant restriction that went into effect on January 1st disqualifies EVs that exceed MSRP price caps. The suggested retail price of an electrified sedan cannot exceed $55,000, and the limit is $80,000 for electrified trucks, vans, and large SUVs. This new rule will deny the Clean Vehicle Credit to many luxury EVs manufactured in North America but will not necessarily disqualify a Mach-E or a Bolt EUV, which will be subject to the $55,000 threshold. The value of the credit will be based on the eligibility rules that are in effect when the taxpayer takes delivery of the vehicle, and it appears that Ford and General Motors have readily available models with qualified sticker prices.
Opportunistic consumers looking to pocket the full tax credit would normally be expected to evade the impending rule changes by purchasing an eligible EV quickly, but the rollout of the Clean Vehicle Credit has been plagued by its excessive complexity, and a sales surge in February may not materialize. The Treasury Department is responsible for administering the perplexing legislation and has had trouble clarifying precise rules and procedures in a timely fashion. The numerous new restrictions on the credit have prevented the agency from publishing an authoritative list of EV models that are eligible for the incentive, and a $7,500 tax credit that a consumer “might” receive may prove to be a very weak incentive.
All the confusion is unfortunate. Consumers have enough reliable information to act decisively, and this appears to be a very good month to buy a qualified electric vehicle. The Mustang Mach-E and the Bolt EUV are temporarily eligible for the full credit, and they are excellent electric vehicles.