New Federal Rules Limit Eligibility for EV Tax Credits

Most EVs sold in the US will be ineligible for federal tax credits under new rules outlined in the Inflation Reduction Act, which go into effect on April 18. The rules set household income caps and vehicle price limits, but also require that critical minerals used in EV batteries be sourced and processed in the US or its free trade partners. This means that most EVs sold in the US will not be eligible for tax credits, as they contain components from foreign entities of concern, likely China and Russia. The rules have already sparked debate among lobbyists and US legislators.