10 electric and hybrid cars that could lose their federal tax credits

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As July draws to a close, Democrats in Congress strike a surprise deal with Senator Joe Manchin dragging his feet on a massive bill called the Inflation Reduction Act of 2022 which aims, among other things, to combat climate change. If passed, the law will make notable changes to the $7,500 federal tax credit for electric vehicles.

The changes could help manufacturers like Tesla, Toyota and GM, which have seen their tax credits expire under the current regime. But the new rules could also hurt other manufacturers – and be a mixed bag for potential EV buyers.

How the Federal Electric Vehicle Tax Credit Changes for New Cars Under the Inflation Reduction Act

  • The plan removes the 200,000 vehicle limit for manufacturers. So Tesla, Toyota and GM – all of which have sold more than 200,000 electric vehicles and PHEVs – would not have their credits cut as they would or have done under the current system.
  • Electric vehicles would have to be built in North America to be eligible for the tax credit.
  • People with incomes above $150,000 or $300,000 per household would not qualify.
  • Only cars under $55,000 or trucks/SUVs/vans under $80,000 would be eligible
  • Rebates can be granted at the time of sale, rather than being deducted from your tax bill the following year.

    Vehicles that would not have a federal tax credit under the Reducing Inflation Act:

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    Nissan Ariya

    A front-drive Nissan Ariya will start at $45,950, meeting the pricing requirements. But the Ariya is built at Nissan’s Tochigi plant in Japan, which means it wouldn’t qualify.

    LEARN MORE

    GMC Hummer EV SUT

    The cheapest EV2 version of the Hummer EV SUT will arrive in the spring of 2024. But it will have a starting price of $84,650, above the federal tax credit threshold.

    READ THE REVIEW

    Electric GMC Hummer SUV

    The next SUV version of GMC’s electric Hummer will be cheaper than the pickup, with an eventual base price of $79,995. But that would push it past the $80,000 limit — assuming all Hummer EV SUV buyers would be eligible to receive it.

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    Porsche Taycan

    Porsche’s Taycan EV is excellent. But it would lose its current federal tax credit of $7,500 because it starts at $86,700 and is built in Germany.

    READ THE REVIEW

    Porsche Cayenne E-Hybrid

    PHEV vehicles may qualify for the full federal tax credit. But the Porsche Cayenne E-Hybrid — currently eligible for a full $7,500 credit — would not be eligible for a federal tax credit starting at $86,500.

    READ THE REVIEW

    Land Rover Range Rover PHEV

    The 2023 Land Rover Range Rover PHEV is currently eligible for a federal tax credit of $7,500. But it wouldn’t qualify under the current system, starting at $108,400 and assembled in the UK.

    READ THE REVIEW

    Subaru Solterra

    Subaru had EV tax credits for resale under the current system. But the Solterra EV, built at a Toyota plant in Japan, would not be eligible for the new federal tax credit.

    READ THE REVIEW

    Volvo C40 Refill

    The C40 Recharge would qualify on price, starting at under $80,000. But it is currently built at the Volvo factory in Ghent, Belgium.

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    The 34 electric cars we’re most looking forward to driving in the future

    The next few years will be filled with new electric vehicles. These are the ones that jazzed us up the most.

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