fbpx
Car News Updated Hourly

Say goodbye to EV tax credit in 2024: Here’s why buying a Tesla, Ford or another electric

  • EVs with batteries from China no longer eligible for $7,500 tax credit 
  • For many Americans, the incentive is a key driver to swap to pricier electric cars
  • Ford Mustang, and some Teslas and Nissan models at risk of having their subsidies cut under new IRS guidelines

Electric cars from Tesla, Ford, Nissan and Volkswagen could cost an extra $7,500 from January as tax credits are removed. 

Officials want US automakers to source batteries from companies based in America, or those with which it has a free trade deal.

This means any that contain materials from China -the leader in EV battery production – will no longer be eligible for the $7,500 credit from January 1, according to new guidelines from the Internal Revenue Service (IRS). 

The tax credit is a key element of the Biden Administration’s Inflation Reduction Act – green legislation designed to accelerate the shift to electric cars.

Given EVs are pricier than gas models, the incentive is a key driver for many swapping to an electric car.

Ford sent out a notice to dealers that the Ford Mustang Mach-E (pictured) was unlikely to qualify for the $7,500 tax credit next year

Ford sent out a notice to dealers that the Ford Mustang Mach-E (pictured) was unlikely to qualify for the $7,500 tax credit next year

Ford sent out a notice to dealers that the Ford Mustang Mach-E, one of the most popular electric cars in the US, was ‘unlikely’ to qualify for the tax credit from January 1, according to Cars Direct

Tesla also warned customers that certain versions of the Model 3 would only be eligible for half of the $7,500 subsidy next year. 

Under the current rules, ten models – including plug-in hybrid cars – are eligible for the full sum of money, while a further seven entitle buyers to $3,750. 

According to the company’s website, the Model 3 Rear-Wheel Drive and the Model 3 Long Range will see their credits halved next year. And according to reports, the Nissan Leaf and Volkswagen ID.4 could also be impacted. 

The changes could prove problematic for car makers and shoppers, as some drivers have been waiting until next year to buy an EV following the announcement earlier this year of a simpler claiming process for tax credits. 

In October, the IRS announced that motorists would be able to take the tax credit off the sticker price of a new car, rather than having to wait to claim the subsidy in their tax return. 

The Model 3 Rear-Wheel Drive and the Model 3 Long Range will see their credits halved next year, Tesla warned on its website

The Model 3 Rear-Wheel Drive and the Model 3 Long Range will see their credits halved next year, Tesla warned on its website

Motorists can claim up to $7,500 back in tax credits when they buy one of these ten electric vehicles currently

Motorists can claim up to $7,500 back in tax credits when they buy one of these ten electric vehicles currently

In the latest announcement, the IRS, the Treasury and the Department of Energy stated that EVs with battery materials sourced from ‘foreign entities of concern’ would be ineligible for the credit.

This refers to companies based in China, Russia, North Korea or Iran, or firms with at least 25 percent voting interest, board membership or ownership by a government of one of those countries. 

These new regulations could reshape automakers’ supply chains, and General Motors and Hyundai have announced plans to build EV plants in the US. 

‘President Biden entered office determined to reverse the decades-long trend of letting jobs and factories go overseas to China,’ John Podesta, senior advisor to the president on clean energy innovation, said in a Treasury statement. 

‘We’re helping ensure that the electric vehicle future will be made in America.’



This article was originally published by a www.dailymail.co.uk . Read the Original article here. .

Subscribe To Our Email List

If you ain't first, you're last! Join to get the latest updates and exclusive offers!

Welcome to the club!

Something went wrong.