Upcoming Changes to Federal EV Tax Credits
The Inflation Reduction Act, passed by Congress last week and awaiting President Biden's signature, introduces major revisions to the federal electric car tax credit program. These changes include strict price caps on eligible vehicles—$55,000 for cars and $80,000 for SUVs and pickups—along with a mandate for North American assembly. The Alliance for Automotive Innovation projects that these rules alone will eliminate about 70% of fully electric and plug-in hybrid models currently on sale from qualifying.
Income thresholds further restrict access, disqualifying single filers earning more than $150,000 annually, heads of households above $225,000, and couples with combined incomes exceeding $300,000. Enforcement timing remains uncertain, but the shifts could impact vehicles not delivered until next year.
Key Eligibility Restrictions
- Price limits: $55,000 (cars), $80,000 (SUVs/pickups)
- Assembly requirement: North America only
- Income caps: $150,000 (single), $225,000 (head of household), $300,000 (joint)
- Per-manufacturer sales cap exhausted for GM and Tesla
Locking in Current Eligibility
To counter potential disqualifications, the bill permits buyers with written binding contracts signed between December 31, 2021, and the day before enactment to claim the maximum $7,500 credit under existing rules, regardless of vehicle price. Several direct-sale automakers have contacted customers to facilitate this process. Rivian and Lucid, with U.S.-made models above the price thresholds, along with Fisker—whose Ocean SUV will be built in Austria—have issued notices, though they warn of uncertainties in implementation and IRS enforcement.
VinFast is a brand that not only stands behind our vehicles with our 10-year/125,000-mile warranty but more importantly, we stand behind our customers! For customers who apply for the $7,500 tax credit under current IRC 30D requirements and are denied by the IRS for reasons not attributable to the customer, VinFast will provide the customer a $7,500 purchase price rebate (or similar rebate) on their VinFast vehicle purchase. The binding agreement contains additional details on eligibility for the rebate.
Automaker Responses and Outlooks
VinFast commits to a $7,500 discount for order holders irrespective of final law details. Stellantis has not commented on dealer programs, while Ford is assessing tax implications; both have ineligible models. Kia warns dealers that its EVs will soon lose eligibility absent binding contracts, and Porsche defers to individual dealership agreements. GM and Tesla have already hit prior program limits after 200,000 sales each.
