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NHADAFeb 10, 20231 min read

Updated Information On EV Clean Vehicle Tax Credits


There's been some additional information released for the EV Clean Vehicle tax credits.

The Internal Revenue Service has revised how it classifies vehicles potentially eligible for a Section 30D Clean Vehicle Credit. As a result, more new battery electric (BEV), plug-in hybrid electric (PHEV), and fuel cell electric vehicle (FCEV) models/trim levels are now considered “SUVs, vans, and pick-ups” for purposes of the credit’s $80,000 MSRP cap. All other BEV, PHEV, and FCEV make/models (e.g., sedans, coupes, station wagons, etc.) are subject to a $55,000 MSRP cap.  

PARTNER SPOTLIGHT

The revised vehicle classifications are based on those in www.fueleconomy.gov, a shopping resource commonly used by both dealers and prospective purchasers, and apply retroactively to January 1, 2023. A listing of which make/models fall under which MSRP cap is available here.

Note: Some BEVs, PHEVs, and FCEVs sold since January 1, 2023, may now be potentially eligible for a Section 30D Credit where they weren’t before.

 Consequently, selling dealers should be prepared to provide purchaser-taxpayers with a Section 30D Clean Vehicle Credit report form as necessary. See IRS FAQs, Topic B, Questions 7 and 9. A sample Section 30D report form is found on the NADA Regulatory Affairs Alternative Fuel Vehicle and Refueling Incentive EV Incentive Webpage along with materials addressing the Section 30D and other the Inflation Reduction Act EV incentives.   

Recently, the IRS has updated the classification of the EVs below and raised the MSRP cap from $55,000 to $80,000. This means that all variants of vehicles like the Tesla Model Y and Volkswagen ID.4 will be eligible for the full $7,500 federal EV tax credit until the IRS releases updated guidance in March. 

These vehicles and all trim levels now have an MSRP cap of $80,000:

  • Audi Q5 PHEV
  • Cadillac Lyric
  • Ford Escape Plug In Hybrid
  • Ford Mustang Mach-E
  • Lincoln Corsair Plug In Hybrid
  • Tesla Model Y
  • Volkswagen ID.4

NHADA will continue to provide updated information on these tax credits as it the program progresses. If you have any questions please call the NHADA office at 603-224-2369

Article Sources:
National Automobile Dealers Association
Plug in America

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