5 THINGS TO KNOW ABOUT THE EV PROVISIONS IN THE INFLATION REDUCTION ACT

The EV incentive provisions in the Inflation Reduction Act of 2022 (the “IRA”) could give a huge boost to the transition beyond gasoline. Here are 5 things you need to know:

1. New EVs are eligible for a federal tax credit of up to $7,500 per vehicle through 2032.
2. Half the tax credit on new EVs 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.
3. 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) to qualify for the tax credit.
4. The dealership can give the tax incentive up front in the form of a discount.
5. 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.

While the IRA provides a boost to EVs and the clean electricity that will power them, the bill will still likely fall short of meeting emissions reduction goals. Read our analysis to learn more.