The federal tax credits for electric vehicles, which have been a cause of confusion for automakers and car shoppers alike for months, just went through another big change.
It’s all because of battery sourcing requirements that are kicking in.
The new rules, which were announced last month, require a certain percentage of battery minerals and components be sourced from North America or a U.S. trade partner. They are meant to incentivize U.S.-based production and were a part of the massive climate bill that revamped the tax credit for electric cars.
The IRS on Monday released an updated list of cars that will qualify under the new battery guidelines on FuelEconomy.gov. It went into effect on Tuesday. And — par for the course for these ever-shifting rules — the list got changed again on Wednesday, with some vehicles added back in.
Overall, General Motors and other U.S. automakers stand to benefit the most from the revamped rules.
Several of the most popular models — like the Tesla Model Y and Chevy Bolt — still get the full $7,500.
But a half a dozen models now get a $3,750 credit instead, and the Nissan Leaf as well as several plug-in hybrids lose the credit altogether.