(CNN) The Treasury Department has revealed which vehicles will be eligible for the New tax credits on electric cars. Fewer models qualify for the new support than in previous years, but some of the most popular electric vehicles still qualify, according to Monday’s announcement.
Under the new rule, consumers can recover up to $7,500 in tax credits on qualifying vehicles.
Sixteen new models and some variations of them are eligible for all or half of the new credit, while nine models—mostly foreign cars—are currently no longer eligible.
Most of the cars that qualify so far have been made by the “Big Three” electric automakers in the US – stronghold (F)General Motors and Stellantis – Plus Tesla (TSLA).
Here’s what you need to know.
What forms qualify for the new electric vehicle tax credit?
2022-2023 Chrysler Pacifica PHEV
2022-2023 Jeep Wrangler PHEV 4xe
2022-2023 Jeep Grand Cherokee PHEV 4xe
2022-2023 Ford F-150 Lightning (Standard and Extended Range)
2022 Ford E Transit
2022-2023 Ford Mustang Mach-E (Standard and Extended Range)
2022 Ford Escape Plug-in Hybrid
2022 Lincoln Corsair Grand Touring
2023 Lincoln Aviator Grand Touring
2022-2023 Chevrolet Bolt
2022-2023 Chevrolet Bolt EUV
2023-2024 CADILLAC LYRIQ
2024 Chevrolet Silverado EV
2024 Chevrolet Blazer EV
2024 Chevrolet Equinox EV
2022-2023 Tesla Model 3 Standard Range RWD
2022-2023 Tesla Model 3 Performance
2022-2023 Tesla Model Y AWD
2022-2023 Tesla Model Y Long Range AWD
2022 Tesla Model Y Performance
Which electric vehicles are not eligible for the new tax credit?
Nine models, most of which are foreign brands including Hyundai and Nissan, do not qualify for the new tax credit. However, that could change — and likely will — in the coming months and years as some of these brands build factories in the US to assemble their cars.
What about used and rented electric vehicles?
a A separate tax credit applies to used electric vehicles, and does not carry such stringent requirements on battery content or manufacturing. Used electric cars qualify for less than an inclusive tax credit and also come with certain income requirements.
Similarly, rental vehicles can also qualify for a $7,500 tax credit without some of the strict rules around car batteries and final assembly, which means consumers who want more choices on which model to drive can settle for leasing rather than buying outright.
Where can I see updates to the eligible electric vehicle list?
The list of eligible new and used electric vehicles will be updated in www.fueleconomy.gov.
How much money can I get back to buy an electric vehicle?
Under the new rule, consumers can receive up to $7,500 in tax credits on qualifying vehicles. There is no limit to the number of electric vehicles you can sell with tax credits, as long as those vehicles meet the requirements. This is a change from the previous rule, which limited the number of vehicles that could be sold with tax incentives.
Will more electric vehicles be added to the tax credit list?
Some cars that were previously eligible for tax credits have been removed under the new rule. But administration officials told CNN that more cars will be added to the list as automakers scramble to move their factories and supply chains to the United States and other countries with these free trade agreements, though that could take months or even years.
Why are fewer electric vehicles eligible for tax credits now?
The new Treasury bill on electric vehicles comes from the Lower Inflation Act, the Climate and Clean Energy Act that Congress passed last year. The rules are written in a way to help move the supply chain of base metals needed for things like electric car batteries, solar panels and smaller rechargeable batteries away from China.
There are two main requirements that automakers must meet if they want their electric vehicles to be eligible for the $7,500 tax credit: a basic metal requirement and a battery component requirement, which are each worth $3,750.
Critical mineral requirements require that a certain percentage of the value of the critical metals that power electric vehicle batteries—such as lithium, nickel, graphite, and copper—must be mined or processed in the United States, or in a country it has a free trade agreement with. It was also possible for the metal to be recycled in North America. Battery component requirements require that a certain percentage of a value battery component be manufactured or assembled in North America.
Importantly, these requirements will increase over several years. For critical metals, the percentage will start at 40% in 2023 and rise each year to 80% by 2027. For battery components, the percentage will start at 50% and rise each year to 90% by 2028.
Administration officials and experts agree that the rules are incredibly complex to be implemented in a very short time frame.
“It’s very complicated,” White House senior adviser John Podesta told CNN recently.
What states can items come from under the new electric vehicle tax credit rule?
21 countries will have free trade agreements on critical minerals with the United States: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama and Peru Singapore and Japan.
Countries including Chile and Australia are noteworthy, both of which have vast supplies of lithium and large-scale mining operations. Senior administration officials said the new rule would make lithium in these countries more competitive: Instead of going to China, the metal could go to Japan or Korea, or directly to the United States. Korea, Mexico and Japan have large car assembly operations, and many of these cars are sold in the United States.
Biden said the United States is also negotiating to add the European Union to the list, and other countries may be added in the future.
How long can it take to establish a critical supply chain for minerals in eligible countries?
The past few months have seen a flurry of announcements from auto companies moving electric vehicle and battery production plants to the United States and neighboring countries.
But experts and officials say starting the critical mineral supply chain — mining and refining critical minerals — will be the most difficult aspect to change. This is in large part because China has a tight grip on it. United State It has a few lithium mines, located in Nevada. Companies are competing to start mining lithium Around the Salton Sea, Californiaalthough commercial operations have not started yet.
Boylan said the Energy Department “could grant a loan to build a battery manufacturing facility.” “It’s a whole different ball game than talking about allowing an open pit lithium mine.”
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