Let’s get real. This new bill, the misnamed Inflation Reduction Act, does include a tax credit for those of us (who earn less than $ 150K [Single]/ $225K [Head of Household]/ $300K (Married) who purchase electric-powered vehicles (EV)

Except…

The facts of the matter is that almost 70% of the electric vehicles (EV) or hybrids don’t pass muster to obtain that credit.

I’m actually glad that we have decided to cut all Chinese vehicles out of the benefits. It means we are attempting to incentivize manufacturers to build/assemble these vehicles here in the USA.  (Yes, EV’s assembled in the USA qualify- IF, 50% of their battery components (until 2024) originate in North America.  By 2028, that percentage increases to 100%.)  If the vehicle only meets one of the two criteria, then the credit is halved.

And, the bill also sets aside some $ 15 billion to retool factories (and that also includes establishing new ones) to help promote EV manufacturing.  Firms that produce EV chargers also get some financial assistance. And, that’s important- since folks like me are going to keep hesitating to buy an EV until we are assured that we can keep our vehicles charged as we travel around the USA.

I’m not alone.  According to  Consumer Reports , the costs for a new EV are only the THIRD biggest concern.  The primary two roadblocks to EV adoption are the range of travel the vehicles can provide- and where will we find a convenient (and reasonable priced?) charging facility.

Yes, I know we’ve been promised about a half-million charging stations.  That was part of the infrastructure bill that passed last year.  Except (a) not much- if any- funds have been disbursed to effect that development.  And, (b), it’s not clear if a half-million stations is a drop in the bucket or will be sufficient to support the EVs across the USA.

Let’s look a little more carefully at the credits that do exist right now.

Starting 1 January 2023, that $ 7500 tax credit will be available for EV- and for hydrogen fuel cell vehicles, as well.  (Actually, it applies from cars purchased on or after 16 August- which is the date the bill passed- but you can’t get the funds until you file your income taxes.)  Moreover, for the first time ever, we’ve included a smaller ($ 4K, which is actually limited to 30% of the purchase price of the used EV, with a maximum sale price of $ 25K [and bought from a dealer, not an individual] and they must be at least two years old) credit for those who buy a used EV. OK. That’s also only for folks who don’t cross the income threshold I listed above.

Oh, and there is also a maximum price for the newly purchased EV- that’s $ 55K for SUV’s and $ 80K for trucks.  (Obviously, no one will be getting that credit for the electric Hummer or the BMW i4. Nor will the Hyundai Ioniq, Kia EV6, or the Toyota bZ4X, since they don’t meet the North American assembly requirements.)

And, starting in 2024, that tax credit will be available at the time of purchase, not when we file our tax returns.

Lots of restrictions, lots of caveats.  But, a credit nonetheless.

Let’s hope those infrastructure funds for EV charging stations across the US get distributed real soon, so we WILL be tempted to buy those EV.

(Hey, Hyundai- start making those EV in your USA factories.  I, for one, would love to own an Ionic.)