August 2022 Gasoline Phaseout News
5 Things to Know About the EV Provisions in the Inflation Reduction Act
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The Inflation Reduction Act of 2022 (the “IRA”) was signed into law today. Its EV incentive provisions could give a huge boost to the transition beyond gasoline. Here are 5 things you need to know:
- New EVs are eligible for a federal tax credit of up to $7,500 per vehicle through 2032.
- Half the tax credit is available if a certain portion of the EV’s critical materials are from the U.S. or a free trade partner or are recycled in North America. The other half is available if a certain portion of the vehicle’s battery’s components are made or assembled in North America.
- There’s a price cap for the purchase of new EVs ($80,000 for SUV, trucks and vans, and $55,000 for all other vehicles) and an income cap ($150,000 for single filers and $300,000 for joint filers).
- The dealership can give the tax incentive up front in the form of a discount.
- Used EVs are eligible for a $4,000 tax credit, with a vehicle price cap of $25,000 and an income cap of $75,000 for single filers and $150,000 for joint filers. There are no sourcing requirements.
