Major rules regarding electric vehicles were announced in 2022, at both the federal and state levels. As it becomes both more economically feasible as well as politically popular, laws and requirements were inked that will affect the car industry as a whole and consumers of automobiles in the U.S. in the years to come.
The Inflation Reduction Act of 2022 shook up parts of the automobile industry with its final assembly requirement. Specifically, in order to be able to offer consumers a tax credit of up to $7,500 for purchasing a zero-emission vehicle, a company would have to have completed final assembly of it in North America. Foreign automakers such as Hyundai were stunned by the quick implementation of the requirement and are scrambling to find ways to comply.
In August, the California Air Resources Board (CARB) approved a year-by-year roadmap saying that by 2035, 100% of new cars and light trucks sold in the state will be zero-emission vehicles. Because of its massive population and market size, the action by California has a massive effect on the auto industry as it moves to meet demand.
The Inflation Reduction Act's Final Assembly Requirement
The tax credits for qualifying vehicles under the Inflation Reduction Act's provisions are still available, but the rules are in transition through December 2022 and will be quite different beginning in 2023.
"Through the end of 2022, the qualified plug-in electric drive motor vehicle credit is still available," Experian wrote on its blog. "It applies to qualifying new electric and plug-in hybrid passenger vehicles and light trucks. The credit is equal to $2,500 plus $417 for every kilowatt hour of battery capacity in excess of four kilowatt hours—up to $7,500 in total credits. Vehicles purchased after August 16, 2022, only qualify for the credit if they underwent final assembly in North America."
Also, automakers that have sold more than 200,000 qualifying vehicles, including Toyota and Tesla, will not be eligible for the credit until 2023.
California Requires Zero-Emissions for New Car Sales by 2035
In August, CARB set California on a path to swiftly grow zero-emission car sales. It put in place a roadmap requiring all new cars and light trucks sold in the state to be zero-emission vehicles. This includes both plug-in and hybrid electric vehicles.
"Once again California is leading the nation and the world with a regulation that sets ambitious but achievable targets for ZEV sales. Rapidly accelerating the number of ZEVs on our roads and highways will deliver substantial emission and pollution reductions to all Californians, especially for those who live near roadways and suffer from persistent air pollution," said CARB Chair Liane Randolph.
"The regulation includes ground-breaking strategies to bring ZEVs to more communities and is supported by the Governor’s ZEV budget which provides incentives to make ZEVs available to the widest number of economic groups in California, including low- and moderate-income consumers," Randolph continued.
Vehicles Eligible for the Tax Credit in 2022
Following is a list of green vehicles that can get the federal tax credits through December 2022, according to the IRS and the U.S. Department of Energy.
EVs
AUDI: e-tron Sportback (2020-2022), e-tron SUV (2019, 2021-2022), e-tron GT / RS e-tron GT (2022), e-tron S (Standard and Sportback), Q4 50 e-tron Quattro
BMW: i3 Sedan (2014-2021), i3s (2018-2021), i4 eDrive40/M50 Gran Coupe (2022), iX xDrive50/M60 (2022)
BYD: e6 (2012-2017), ELECTRIC LAST MILE SOLUTIONS (ELMS), ELMS Urban Delivery (2022)
FIAT: 500e (2013-2019)
FORD: Focus EV (2012-2018): Mustang Mach-E (all 2021/2022 trims including GT), E-Transit (2022), F-150 Lightning (standard/extended range) (2022)
GENESIS: GV60 (2023)
HYUNDAI: Ioniq Electric (2017-2021), Ioniq 5 (2022), Kona Electric (2019-2022)
JAGUAR: I-Pace (2019-2022), I-Pace HSE (2022-2023)
KIA: Niro EV (2019-2022), Soul Electric (2015-2020), EV6 (58 kWh, 77.4 kWh) (2022)
LUCID MOTORS: Lucid Air Dream Edition (2022, Lucid Air Grand Touring (2022)
MAZDA: MX-30 (2022)
MERCEDES-BENZ: AMG EQS (2022), EQS 450+ (2022), EQS 580 4matic (2022), B-Class EV (2014-2017)
MINI: Cooper S E Hardtop 2 & 4 Door (2020-2023)
MITSUBISHI: i-MiEV (2012, 2014, 2016, 2017)
NISSAN: LEAF (2011-2022)
POLESTAR: Polestar 2 (2021), Polestar 2 Long Range – Single & Dual Motor (2022)
PORSCHE: Taycan (2020-2022)
RIVIAN: R1T (2022): R1S (2022), EDV 700 (2022)
SMART USA: EQ fortwo Coupe (2019), EQ fortwo Cabrio (2019)
SUBARU: Solterra (2023)
VOLKSWAGEN: e-Golf (2015-2019), ID.4 EV (First/Pro/Pro S) (2021)
VOLVO: C40 Recharge Pure Electric (2022, XC40 Recharge Pure Electric (2021-2022)
Plug-In Hybrid
AUDI: A3 e-tron / e-tron ultra (2016-2018), A7 55 TFSI e Quattro (2021), A7 TFSI e Quattro (2022), A8L PHEV (2020), A8L 60 TFSI e Quattro (2021), Q5 PHEV (2020), Q5 55 TFSI e Quattro (2021), Q5 TFSI e Quattro (2022)
BENTLEY: Bentayga Hybrid (2020-2021)
BMW: i3 Sedan w/ Range Extender (2014-2021), i3s w/ Range Extender (2018-2021), BMW i8 (2014-2017), i8 Coupe/Roadster (2018-2020), X3 xDrive30e (2020-2021), X5 xDrive40e (2016-2018), X5 xDrive45e (2021-2022), 330e (2016-2018), 330e/330e xDrive (2021-2022), 530e/530e xDrive (2018-2019) 530e/530e xDrive (2020-2022), 740e (2017), 740e xDrive (2018-2019), 745e xDrive (2020-2022)
CHRYSLER: Pacifica Plug-In Hybrid (2017-2022)
FERRARI: SF90 Stradale (2020-2021)
FISKER AUTOMOTIVE: Karma Sedan (2012)
FORD: C-Max Energi (2013-2017), Fusion Energi (2013-2018), Fusion Energi (2019-2020), Escape Plug-in Hybrid (2020-2022)
HONDA: Accord Plug-in Hybrid (2014), Clarity Plug-in Hybrid (2018-2021)
HYUNDAI: Ioniq Plug-in Hybrid (2018-2022, Sonata Plug-in Hybrid (2016-2019, Tucson Plug-in Hybrid (2022), Santa Fe Plug-in Hybrid (2022)
JEEP: Grand Cherokee PHEV (2022), Wrangler Unlimited PHEV (2021-2022)
KARMA: Revero (2018-2020)
KIA: Niro Plug-in Hybrid (2018-2022), Optima Plug-in Hybrid (2017-2020), Sorento Plug-in Hybrid (2022)
LAND ROVER, Range Rover/Sport PHEV (2019), Range Rover/Sport PHEV (2020-2022), Range Rover SE PHEV (2023), Rover Range Rover Sport Autobiography PHEV (2023)
LINCOLN: Aviator Grand Touring (2020-2022), Corsair Reserve Grand Touring PHEV (2021-2022), Corsair Grand Touring PHEV (2022)
McLAREN: Artura (2022)
MERCEDES-BENZ: S550e Plug-in Hybrid (2015-2017), GLE550e 4matic (2016-2018), GLC350e 4matic (2018-2019), GLC350e 4M EQ (2020), S560e EQ PHEV (2020), C350e (2016-2018)
MINI: Cooper S E Countryman ALL4 (2018-2019), Cooper S E Countryman ALL4 (2020-2022)
MITSUBISHI: Mitsubishi Outlander Plug-in (2018-2020), Mitsubishi Outlander Plug-in (2021-2022)
POLESTAR: Polestar 1 (2020-2021)
PORSCHE: Cayenne S E-Hybrid (2015-2018): Cayenne E-Hybrid / Coupe (2019-2020): Cayenne Turbo S E-Hybrid / Coupe (2021), Cayenne E-Hybrid / Coupe (2021-2022), Panamera S E-Hybrid (2014-2016), Panamera 4 E-Hybrid (2018), Panamera 4 E-Hybrid (2019-2020), Panamera 4 E-Hybrid (2021-2022)
SUBARU: Crosstrek Hybrid (2019-2022)
TOYOTA: Prius Plug-in Hybrid (2012-2015), Prius Prime Plug-in Hybrid (2017-2022), RAV4 Prime Plug-in Hybrid (2021-2022)
VOLVO: S60 (2019), S60 (2020-2022), S60 Extended Range (2022), S90 (2018-2019), S90 (2020-2022), S90 Extended Range (2022), V60 (2020-2022), V60 Extended Range (2022), XC60 (2018-2019), XC60 (2020-2022), XC60 Extended Range (2022), XC90 (2016-2017), XC90 / XC90 Excellence (2018-2019), XC90 (2020-2022), XC90 Extended Range (2022)
Vehicles Eligible for the Tax Credit in 2023
From January 1, 2023, the two lists will change dramatically in view of the new eligibility conditions. Here, in a much smaller list, are the clean vehicles that could qualify for the full $7,500 credit going forward.
EVs
GENERAL MOTORS: Cadillac Lyriq (2023), Chevrolet Bolt EUV (2022)Chevrolet Bolt EV (2022-2023)
FORD: F-150 Lightning (2022) (Pro, XLT, and Lariat trims), Mustang Mach-E (2022), E-Transit (2022)
NISSAN: LEAF (2022-2023)
RIVIAN: EDV 700 (2022), R1T (2022) (Dual Motor Adventure only), R1S (2022) (Dual Motor Adventure only)
TESLA: Model 3 (2022), Model Y (2022)
Plug-In Hybrid
AUDI: Q5 (2022)
BMW: 330e (2022-2023), X5 xDrive45e (2022)
CHRYSLER: Pacifica Plug-in Hybrid (2022)
FORD: Escape Plug-in Hybrid (2022)
JEEP: Grand Cherokee PHEV (2022), Wrangler Unlimited PHEV (2022)
LINCOLN: Aviator PHEV (2022), Corsair Plug-in Hybrid (2022)
VOLVO: S60 (2022)
