The Inflation Reduction Act’s federal clean vehicle tax credit for electric and other zero-emission vehicle purchases is shelling out the cash.
The Internal Revenue Service reported this week that more than $1 billion in upfront credits have been claimed by car shoppers this year.
That doesn’t include credits to be filed later on tax returns.
The program provides up to $7,500 on new electric vehicle purchases and $4,000 on used vehicle purchases from registered dealers at selling prices up to $25,000.
New cars have a price limit of $55,000 while the threshold for SUVs and pickups is $80,000. There are also income limits of $150,00 for individuals, $225,000 for head of household and $300,000 for married filing jointly. Factory workers are surely benefitting from incentivized sales, but not just in the USA.
While any used car is eligible — with income limits half that of new vehicles — the new car credit only requires that qualifying cars and their battery packs be assembled in North America, including Canada and Mexico.
Production of the electric Dodge Charger is set to kick off in Canada later this year, but many of the current and upcoming EVs from U.S. automakers are being manufactured in Mexico, including several key models.
CADILLAC OPTIQ
Cadillac confirmed this week that the Optiq, its new entry-level EV, will be built at its Ramos Arizpe plant in Mexico alongside the Chevrolet Equinox that shares its platform.
CHEVROLET BLAZER EV
The midsize Blazer EV had a rocky start with software issues that held up its launch earlier this year, but vehicles are now flowing from Ramos Arizpe. The Honda Prologue that is based on the same platform is also manufactured at the facility.
CHEVROLET EQUINOX EV
The Chevrolet Equinox EV has been almost universally praised for its appeal and value. The compact SUV provides 319 miles of range and will be offered in a $34,995 model later this year that qualifies for the full federal tax credit, meaning the out the door price is $27,495.
FORD MUSTANG MACH-E
Ford has dialed back its electric vehicle ambitions to start bringing more hybrids into the mix, but its first shot at selling an electric SUV is still going strong. Sales of the Mustang Mach-E, which is built at Ford’s Cuautitlán Assembly plant, were up 45.9% year-over-year through May, but it doesn’t currently qualify for the credit due to materials sourcing that is outside of the program’s updated rules for 2024.
JEEP WAGONEER S
The Jeep Wagoneer S will be the brand’s first all-electric model when it goes on sale later this year. The midsize SUV is launching in a top of the line 600 hp trim priced at $71,995 that has 300 miles of range and will be built at the Toluca, Mexico, factory that produces the Compass.
