Some electric vehicles and plug-in hybrids are set to get less affordable from next year, it seems. As expected, the incoming Trump administration has set its sights on killing off the IRS clean vehicle tax credit, according to a report in Reuters this afternoon.
The clean vehicle tax credit was overhauled as part of President Joe Biden’s signature climate legislation. Until then, the size of a plug-in vehicle’s tax credit was based on its battery capacity, with a credit of up to $7,500 available. But from 2023 the rules changed, requiring a certain amount of domestic production to qualify, as well as adding price and income caps to address criticism that the tax credit mostly subsidized the already-wealthy.
Far fewer vehicles are now eligible for the rebate at time of purchase, particularly after the US Treasury Department got tougher about Chinese content, although a loophole means that none of these conditions apply to leased EVs.