“Tesla Cybertruck and Nissan Leaf Among Electric Vehicles Losing US Tax Credits”

Electric Vehicles, Including Tesla Cybertruck and Nissan Leaf, Lose US Tax Credits Under New Battery Sourcing Rules

Washington: Effective Monday, several electric vehicles, including the Nissan Leaf, Tesla Cybertruck All-Wheel Drive, and Chevrolet Blazer EV, are no longer eligible for tax credits of up to $7,500, according to the U.S. Treasury. The new rules, outlined in December, focus on battery sourcing requirements to reduce reliance on China in the U.S. electric vehicle supply chain.

The eligibility for U.S. EV tax credits has dropped from 43 to 19 models, considering different versions of the same vehicle type. Some manufacturers are yet to submit information on eligible vehicles, potentially leading to further changes in the list.

Under the new guidelines, buyers can claim the tax credit at the point of sale, with limits on vehicle price and buyer income. Vehicles like the Volkswagen ID.4, Tesla Model 3 Rear Wheel Drive, BMW X5 xDrive50e, Audi Q5 PHEV 55, Cadillac Lyriq, and Ford E-Transit no longer qualify for the tax credits.

Volkswagen expressed optimism that its MY2023 ID.4s and all MY2024 ID.4s will be eligible under the new rules after confirming their eligibility for the federal EV tax credit.

Automakers are adjusting their supply chains to ensure compliance with the new clean vehicle credit, partnering with allies, and bringing jobs and investment back to the United States, according to the Treasury.

Ford Motor announced last month that its E-Transit would lose the $3,750 tax credit, along with the Mach-E and Lincoln Aviator Grand Touring plug-in hybrid. However, the F-150 EV Lightning and the Lincoln Corsair Grand Touring retained credits.

General Motors noted that all its EVs, except the Chevrolet Bolt, would temporarily lose eligibility. The Lyriq and Blazer EV are losing the credit due to two minor components, but GM expects them to regain eligibility in early 2024 after a sourcing change. The Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac OPTIQ produced after the sourcing change will be eligible for the full incentive.

The 2022 Inflation Reduction Act reformed the EV tax credit, requiring vehicles to be assembled in North America to qualify, eliminating nearly 70% of eligible models at the time.