![]() ![]() Joe Manchin, D-W.Va., a major proponent of the new law’s North American production rules, said the decision “bends to the desires of the companies looking for loopholes and is clearly inconsistent with the intent of the law.” Rules for Buyers of New EVs Remain Not all automakers supported the leasing exception, including GM, Tesla and Toyota. The decision to allow that is a win for those automakers, though the impact remains to be seen - the leasing rate for new EVs was about 10% in the third quarter of 2022 versus 18% for all vehicles, according to data tracker Experian. The companies lobbied for their leasing units to be allowed to get the commercial credit. Win for Global AutomakersĪutomakers in Europe, South Korea and Japan - who currently build many EVs in their home countries - had loudly complained about the new law’s restrictions on the EV purchase credit, which were imposed to help promote North American production. The new federal rules do not affect state and local subsidies available for EV buyers. The credit goes to the leasing company - the vehicle owner - but it can be passed to the consumer in the form of lower lease payments. On top of all that, the Department of Treasury guidance released at the end of December allows the less restrictive commercial credit to also apply to vehicles leased by consumers that means most plug-in and fuel-cell EVs currently on the market can qualify, including those built in Europe or Asia. Significantly, the commercial credit does not have the origin, price or other restrictions of the credit for consumer buyers. It offers up to $7,500 for light-duty vehicles (under 14,000 pounds) and up to $40,000 for heavier vehicles. A third is a “commercial” credit for businesses acquiring EVs.A second is a new credit of up to $4,000 for buyers of used EVs.Additionally, since August, it has required that the vehicles be assembled in North America. ![]() One category extends the former credit of up to $7,500 for consumers buying new EVs and PHEVs, but it puts new limits on vehicle price and buyer income and will soon add requirements for the sourcing of EV batteries and materials.Related: What to Know Before Purchasing an Electric Vehicle: A Buying GuideĪ revised federal credit program signed into law in August 2022 includes three categories for EV credits and took effect Jan. Department of Treasury’s gift to electric-vehicle shoppers (and global automakers) for the new year was to make many more EVs and plug-in hybrids eligible for the federal tax subsidy of up to $7,500 - including vehicles built outside North America - as long as drivers lease them or buy used rather than buy new. ![]()
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