Only 10 vehicles qualify for Biden’s EV tax credit

Most electric vehicle (EV) owners who are filing their 2022 tax returns this month are discovering they do not qualify for the $7,500 EV tax credit in Joe Biden’s Inflation Reduction Act of 2022.

The tax credit was presented as a magnanimous incentive to buy EVs amid the Biden administration’s goal that 50% of all new vehicle sales be electric by 2030.

However, several caveats in the Inflation Reduction Act severely limit the number of EVs eligible for the tax credit.

For one thing, new electric passenger cars and sedans must have a purchase price of $55,000 or less to qualify. The average EV, however, costs $61,000. Used EVs must have a purchase price of $25,000 or less and they must be at least two years old.

Furthermore, new EV buyers must make below a certain income threshold to qualify — up to $300,000 for married joint filers, and under $150,000 for single filers. For used cars, the numbers drop to half that amount.

Certain percentages of the battery components must be manufactured in North America, where the vehicle must be assembled. This further limits the number of eligible vehicles since 80% of lithium-ion batteries are manufactured in China, according to the Daily Wire.

When all qualifications are met, only ten out of roughly 40 EV vehicle brands are eligible for the tax credit: The Chrysler Pacifica, the Ford F-150 Lightning, Chevrolet’s Bolt, Blazer, Silverado, and Equinox, the Cadillac Lyriq, the Lincoln Aviator Grand Touring, and the Tesla Model 3 and Model Y.

Many EV owners who were hoping for a tax credit may be further disappointed to learn that they will also be charged a higher annual registration fee than their gas-powered counterparts.

Several US states are now imposing additional registration fees on EV owners. These states have pushed for “sustainable” and “environmentally friendly” alternatives but are now losing millions of dollars in gasoline tax revenue. Illinois Democrats, for instance, proposed charging EV owners a $1,000 annual registration fee to recoup the loss in gas taxes. After intense backlash, however, the Prairie State settled on charging EV owners a $251 annual registration fee, $100 more than their ICE (internal combustion engine) counterparts.

At least 19 states have imposed an extra annual registration fee for EVs ranging from $50 to $235, with Blue states such as Michigan and Georgia at the higher end.

In the United States electric vehicles are now generally more expensive to drive than gas-powered internal combustion engine vehicles, according to a study published in January.

While upfront purchase costs may vary, the study found that “[t]ypical mid-priced ICE car drivers paid about $11.29 to fuel their vehicles for 100 miles of driving. . . . That cost was around $0.31 cheaper than the amount paid by mid-priced EV drivers charging mostly at home, and over $3 less than the cost borne by comparable EV drivers charging commercially.”

The cost difference becomes even starker when factoring in EV drivers who need to recharge frequently at charging stations at an estimated cost of $14.40 per 100 miles.