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Extended EV tax credit with $7,500 point-of-sale, $4,000 rebate on used electric vehicles could soon be passed by the Senate

Congress appears to be about to pass a long-awaited extension of — and expansion of — the federal EV tax credit.

The expanded tax credit inclusion bill is being passed by the Senate, after an agreement was struck between Majority Leader Chuck Schumer and Senator Joe Manchin, who opposed most of the Senate’s agenda. his party. If passed by the Senate, the measure would still need a vote in the House of Representatives before it could be enacted.

As part of a $369 billion bill package addressing climate and energy policy, the law expands the existing $7,500 EV tax credit and adds a new $4,000 credit for used cars use – but with some conditions.

2022 Ford F-150 Lightning

2022 Ford F-150 Lightning

To qualify, vehicles will need batteries with raw materials extracted or processed in a country with which the United States has a free trade agreement, and battery packs that must contain a large amount of North American-sourced components.

The law also introduces price limits of $55,000 for new cars and $80,000 for pickups and SUVs, as well as income limits for buyers. For new vehicles, those limits are $150,000 for single taxpayers and $300,000 for joint taxpayers. For used cars, the sale price drops to $75,000 for a single filer and $150,000 for a shared filer. But the law also allows taxpayers to receive point-of-sale credits.

The latter can be a game changer. WE Buyers love discounts at the point of sale a wide margin and will even be lower than the tax credit they need to wait for, a recent survey shows.

2023 Toyota bZ4X Limited AWD

2023 Toyota bZ4X Limited AWD

The revised tax credit will also remove the 200,000-unit limit that currently causes disqualification for automakers, and some manufacturers have exceeded this limit. Toyota hit the 200,000 cap a quarter earlier than previously expected — which makes the situation a little more pressing.

It is highly desirable to extend the EV tax credit for a long time, but because bonus reduction for union-produced vehicles there seems to be more support — perhaps most importantly, from Manchin. That’s after automakers regroup to revive the effort in June.

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