Yup. I tried to talk to my BMW dealer lets sign a binding contract to make sure there are no huccups but he refused… had no idea what I was talking about.
The legacy carmakers like Kia/Hyundai/Genesis, Toyota shall, while they are ramping NA production and securing materials, put all thrust in high quality good MPG hybrids. Many people would still buy those for years instead of EV.
E.g. compare KIA Sportage Hybrid is $20k less than VW ID.4
I’m so confused about this new EV Rebate, does that mean we’ll get cheap Mini Cooper SE or Bolt EV leases when the credit activates?
It doesnt look like this would apply on leases.
I think they’re using the term ‘purchase’ loosely.
purchase
pûr′chĭs
transitive verb
- To obtain in exchange for money or its equivalent; buy.
- To acquire by effort; earn.
- To pull or haul by means of a mechanical device, such as a winch.
If I order a 2023 Jeep Wrangler 4xe and get it before the end of the year (???), will I be eligible for the $7500 federal credit? Does the income limits kick in for purchases made after Aug 16 and before Dec 31? As wranglers are assembled in US, are they still eligible for the 7500$ without income limits through the end of the year?
The IRS guidance is not very clear about it
### Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.
Yes. Because there are no changes for 2022 purchases unless the car is assembled outside North America. The domestic assembly requirement is the only aspect of the IRA that is effective upon enactment (Aug. 16, 2022). The other requirements, such as on price of vehicle or income testing, go into effect on Jan. 1st.
1 Like
Does this apply to 2023 models as well… I think they are also assembled in US… Wrangler 4xe is listed in the vehicles list by the govt
As long as you have it delivered before year end, you should be good, model year does not matter.
1 Like
The previous language was very specific about how the credit applied to leases. Purchase was not used loosely.
1 Like
Not sure if posted already but a cheat sheet on the new rules for 2023
2 Likes
In my experience, with things like this, there will be a few things that happen:
- The IRS will issue clearly delineated (sometimes, clearly, hah) treasury regulations to further define the changes to the law.
- Taxpayers will write in, whether individuals, auto makers, or others, and the IRS will issue letter rulings and other guidance regarding this. I fully expect forthcoming IRS guidance in general, similar to when the TCJA, ARPA, and CAA were passed, for instance.
The IRS even has this posted on its website:
" Future Guidance
To reduce carbon emissions and invest in the energy security of the United States, the Inflation Reduction Act of 2022 significantly changes the eligibility rules for tax credits available for clean vehicles beginning in 2023. The Internal Revenue Service and the Department of the Treasury will post information and request comments from the public on various existing and new tax credit incentives in the coming weeks and months. Please look for updates on IRS.gov and other announcements from the Administration."
Note the request comments piece.
As for my full summary, it ended up being more about the other provisions of the bill and the state tax implications. What can be deciphered from the law’s language has already been stated here so far:
- cars purchased between August 16 and the end of the year that are manufactured in North America are good to go on the credit. Battery requirements and income limits will not apply until on and after January 1, 2023.
- cars that are manufactured outside the US have lost the credit. It will be interesting for the IRS to have to bifurcate cars such as the 330e, which is manufactured both in Mexico and in Germany. 330e right now = no credit. 330e NA = credit.
I’m also curious to see if anyone will challenge the provision of “final assembly in North America.” For instance, if you have a BMW with port installs, would that count as “final assembly?” As we lawyers say, “it depends.”
4 Likes
Good point. The Monroney lists the point of final assembly, for which the VIN is encoded. Ordering an iX from Germany with a W VIN and then having a PIO performed in the US shouldn’t make it eligible under the new law, but that doesn’t mean someone won’t challenge it…
1 Like
Exactly, but define “final assembly.” If I ordered a car specifically with a spoiler or a splitter (even the 330e has CF interior trim available) that gets installed at the port, it won’t be “finally assembled” until it’s at the port.
1 Like
IANAL (you are), but I believe 49 CFR § 583.4 (4 and 5) define it. But it can still be picked-apart.
I spent a billable hour (my $) with my lawyer today over a semi-colon, so I’m the wrong person to ask.
4 Likes
So here’s the funny thing:
Final assembly point means the plant, factory, or other place, which is a building or series of buildings in close proximity, where a new passenger motor vehicle is produced or assembled from passenger motor vehicle equipment and from which such vehicle is delivered to a dealer or importer in such a condition that all component parts necessary to the mechanical operation of such automobile are included with such vehicle whether or not such component parts are permanently installed in or on such vehicle. For multi-stage vehicles, the final assembly point is the location where the first stage vehicle is assembled.
What about vehicles with stop sales that need chips to function and they are installed at the port in the US because of the shortage? That’s what people may argue…for now. Or, will manufacturers pull crap like that in the future to get more cars to qualify and to boost sales? Regulations will definitely be necessary to define and clarify this, as well as close loopholes.
2 Likes
Dunno?
What if Kia/Hyundai finds a NA battery partner and sends cars built in SK without batteries to Canada or Mexico, and has the batteries installed there? Does the VIN code matter anymore?
This is basically LG/Samsung’s appliance business model: final assembly in Mexico to qualify under whatever NAFTA is called now.
4 Likes
I would think youd meet the letter of the law if you shipped a non-running vehicle and then indepedently sourced the final part needed for port install. The shipping logistics of that sound painful though.
2 Likes
Downside: cranes and tow trucks to move all those cars around. Impossible with 2019 volumes. Now? Dunno
Upside: a boat full of battery-less EVs won’t end up at the bottom of the ocean
A consumer could test this in theory, I think it would take an OEM with lots of lawyers and lobbyists to actually challenge. One of the companies slighted by this bill should give it a try.
1 Like