Biden’s new electric vehicle tax credits, explained

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The Inflation Reduction Act will replace current EV tax credits with new ones, but there are some confusing limitations and timelines to sort through.

President Biden has signed the new Inflation Reduction Act into law. [1] One of the biggest changes? New tax credits for electric vehicles — whether you bought one this year or plan to in the future.

However, the qualifications, limitations, and timelines are a bit confusing, to say the least, so we confirmed all the details with the IRS, the Department of Energy, and the law itself to demystify the new EV tax credits.

How much is the new EV tax credit?

The new credits will be $7,500 for new vehicles and $4,000 for used vehicles, and will apply to the purchase of EVs, plug-in hybrids, and cars with hydrogen fuel cells, and will be available from 2023 to 2032.

However, there are some limitations.

  • Income restrictions: Married couples must have an adjusted gross income (AGI) of less than $300,000 and single people must have an AGI of less than $150,000.

  • Vehicle price restrictions: You can earn a tax credit for the purchase of an electric van, SUV, or pickup truck that costs less than $80,000, while other EVs have a limit of $55,000.

  • Manufacturing restrictions: If your EV (or the individual parts, like batteries) was manufactured or sourced outside of North America, you likely won’t be eligible for the tax credit.

  • Used EV restrictions: To qualify for the credit, you would need to purchase a car that is at least two model years old, and the credit would be either $4,000 or 30% of the price of the car, whichever is lower, with a price cap of $25,000.

When do the new EV tax credits take effect?

The timeline is a bit confusing. The Inflation Reduction Act eliminated the old EV tax credits immediately, but the new credits don’t go into effect until January 1, 2023. The bill includes a “transition rule” that allows buyers who signed a binding purchase agreement for an EV before August 16, 2022, to qualify under the old EV tax credit agreement.

But what about EV purchases between August 17 and December 31 of this year? According to the IRS: “If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold).” [2]

Which electric vehicles qualify for the new tax credits?

Finally, the EV you purchase(d) must meet a new “final assembly in North America” requirement. The Department of Energy has assembled a list of electric vehicles that may meet the final assembly rule, but if you want to know where a specific vehicle was manufactured, you can use the NHTSA VIN Decoder to find out if a particular car meets the manufacturing requirements for the tax credits in 2022.

Here’s the list of electric vehicles manufactured in North America according to the Department of Energy. If the sales cap is listed as “met,” that means the model has “reached a cap of 200,000 EV credits used and are therefore not currently eligible for the Clean Vehicle Credit,” according to the Department.

Model year

Vehicle

Sales cap

2022

Audi Q5

2022

BMW 3-series Plug-In

2022

BMW X5

2022

Chevrolet Bolt EUV

Met

2022

Chevrolet Bolt EV

Met

2022

Chrysler Pacifica PHEV

2022

Ford Escape PHEV

2022

Ford F Series

2022

Ford Mustang MACH E

2022

Ford Transit Van

2022

GMC Hummer Pickup

Met

2022

GMC Hummer SUV

Met

2022

Jeep Grand Cherokee PHEV

2022

Jeep Wrangler PHEV

2022

Lincoln Aviator PHEV

2022

Lincoln Corsair Plug-in

2022

Lucid Air

2022

Nissan Leaf

2022

Rivian EDV

2022

Rivian R1S

2022

Rivian R1T

2022

Tesla Model 3

Met

2022

Tesla Model S

Met

2022

Tesla Model X

Met

2022

Tesla Model Y

Met

2022

Volvo S60

2023

BMW 3-series Plug-In

2023

Bolt EV

Met

2023

Cadillac Lyriq

Met

2023

Mercedes EQS

2023

Nissan Leaf

Source: US Department of Energy, Alternate Fuels Data Center

 

This article originally appeared on Policygenius and was syndicated by MediaFeed.org.

 

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Which electric car really has the longest range?

 

Although so-called ‘range anxiety’ is slowly being reduced by the development of longer-range electric cars and construction of charging stations, how far a plug-in car can travel before needing a top-up is still a crucial consumer consideration.

Because electric chargers are still less common than gas stations, driving an electric car long distances requires more planning – and charging the battery still takes longer than filling even the largest fuel tank.

But change is afoot, and some electric cars can travel comfortable over 300 or even 350 miles on a charge, according to the claims made by their manufacturer. Your mileage will of course vary, depending on speed, driving style, ambient temperature and myriad other variables – not least the test cycle used to work out the claimed range. But it is still useful to compare the claimed range of one EV to another, just like comparing the miles-per-gallon figures of internal-combustion cars.

Here are the longest-range electric cars currently on sale in the US, as of September 2020.

 

Tesla

 

Tesla still leads the way when it comes to outright range (and acceleration performance), with the Model S, Model X and Model 3 taking the top three places in the current long-range standings.

The overall winner is the Model S Long Range Plus, which has an EPA-estimated range of 402 miles. The flagship Model S has had the same 100kWh battery capacity for years now, but Tesla no longer uses this number in the car’s name.

The quicker Model S Performance has a range of 348 miles, but can accelerate to 60 mph in a supercar-beating 2.3 seconds, and has a top speed of 163 mph. This compares to a still-respectable 3.7 seconds and 155 mph for the Long Range Plus, which is now the entry-level Model S.

 

Tesla

 

Next comes the larger Model X Long Range Plus. This uses exactly the same battery pack and motors as the Model S, but the car’s larger size and greater weight mean it is less energy efficient, so outright range dips to an EPA-estimated maximum of 351 miles.

The Model X Performance offers up to 305 miles of range, which is still more than any other electric SUV currently on sale, while also hitting 60 mph in 2.6 seconds and having a top speed of 163 mph.

 

Tesla

 

The bronze medal also goes to Elon Musk’s company with the Model 3 Long Range, which has an EPA-measured range of 322 miles. The car is smaller and lighter than its siblings, but its battery pack is also more compact, hence the lower range.

The cheaper Model 3 Standard Range Plus has a claimed range of up to 250 miles, which is more than premium options like the Jaguar I-Pace and Audi e-tron SUV. Finally, the Model 3 Performance has a range of 299 miles, a 0-60 time of 3.2 seconds and a top speed of 162 mph.

 

Tesla

 

Tesla’s latest car, the Model Y, is what the Model X is to the S. In other words, it uses the same chassis as the Model 3, but is a taller vehicle. The Model Y is priced from $43,690 for the Long Range version, which has an EPA-estimated range of 316 miles, a zero-to-sixty time of 4.8 seconds and a top speed of 135 mph.

Above this is the Model Y Performance, which costs from $53,690. As ever with Tesla’s Performance vehicles, the range drops to 291 miles, but the 60 mph time drops to 3.5 seconds and the top speed is increased to 155mph.

 

Tesla

 

Recently face-lifted for 2020, the Chevrolet Bolt is a small family car with a range of up to 259 miles (up from 238 miles in 2019) and a starting price of $38,330 before federal tax credit and other incentives.

The Bolt offers Apple CarPlay and Android Auto connectivity for its 10.2-inch infotainment touch screen, plus the car can be bought with a 4G Wi-Fi hotspot. There’s also the myChevrolet app for checking the charge status of the battery from your smartphone – just like on a Tesla.

Safety features include automatic low-speed emergency braking with pedestrian detection, rear vision camera and lane-keep assist, which provides alerts and gentle steering inputs to keep you from drifting out of your lane. This isn’t quite the same as Tesla’s Autopilot system, but provides a similar level of safety assistance.

 

felixmizioznikov / istockphoto

 

Up next is the Hyundai Kona Electric, which has an EPA-rated range of 258 miles and costs a respectable $37,190.

Available in three trim levels – SE, Premium and Premium SE – the Kona Electric is offered with a 39 kWh or 64 kWh battery pack, along with Apple CarPlay and Android Auto.

The Hyundai’s acceleration cannot match that of any Tesla (as little as 2.3 seconds in the Model S Performance) but posts a 0-62 mph (100 km/h) time of 7.6 seconds, which is perfectly adequate for a sensible family car.

Hyundai also lacks access to Tesla’s Supercharger network (which is for the exclusive use of Tesla drivers) but can still fully recharge in 75 minutes using a rapid public charger.

 

Jarretera / istockphoto

 

Very similar to the Kona, the Niro EV has an EPA range of up to 239 miles from its equally-sized 64kWh battery pack. The Niro also has Apple CarPlay and Android Auto, displayed on an eight-inch touchscreen, upgradeable to 10.25 inches. Thanks to 50 kW DC fast-charging, the Niro can refill its battery from empty to 80 percent in 75 minutes.

As with many cars sold in 2020 (and especially EVs), the Niro works with its own smartphone app, which can be used to check on the battery level and charge status, lock or unlock the doors and set the climate control remotely before you get in. There’s also Amazon Alexa and Google Assistant integration, so you can ask either assistant about battery charge level.

 

teddyleung / istockphoto

 

The first luxury electric car to come from an established brand – and thus take the fight to Tesla before anyone else – is the Jaguar I-Pace.

The Jaguar is short on range compared to the Model S and Model X, at 234 miles, but at $70,875 its starting price is slightly less than its US rivals.

The I-Pace reviewed very well when it was launched in 2018, and offers sports car performance (0-60 mph in 4.5 seconds) from a practical family car with plenty of storage space, thanks to its lack of a bulky engine and associated drivetrain.

If you can find a rapid 100kW DC public charger, the Jaguar can refill its battery pack from almost empty to 80 percent in 45 minutes.

 

teddyleung / istockphoto

 

The S Plus version of the Nissan Leaf has a range of up to 226 miles, yet costs just $36,550, making it good value for money as far as electric cars – which generally command higher prices – are concerned. The flagship Plus model offers a 0-62 mph time of 7.1 seconds and a top speed of 91 mph.

While Nissan is keen to publicize the car’s one-pedal driving mode, in truth, this is a common feature of all electric cars.

The vehicle slows more quickly the further you lift the accelerator pedal, instead of coasting with minimal slowing like a non-electric car. This is called regenerative braking and turns the electric motor into a generator, harvesting energy lost during coasting and braking back into the battery.

When plugged into the fastest public charger, Nissan says the Leaf Plus can refill its battery from 20% to 80% in around 60 minutes, somewhat slower than a Tesla using a Supercharger, or a car using the under-construction Electrify America network.

 

tupungato / istockphoto

 

The e-tron SUV is the first electric car from Audi. To be joined by an entire e-tron family over the coming years, the SUV is seen as a close rival to the Jaguar I-Pace, the Mercedes EQC and the BMW iX3.

A unique feature of the e-tron is how Audi offers a pair of cameras and displays instead of wing mirrors. This helps to reduce aerodynamic drag, thus increasing range, but despite being available in Europe, it’s still pending regulatory approval in the US.

Even without this option, the e-tron’s interior includes three digital displays – one behind the steering wheel and two touch screens for interacting with the car’s climate and infotainment systems.

Audi claims the SUV can hit 62 mph in under six seconds, and the battery can be topped up from almost empty to 80% within 30 minutes using the fastest public chargers.

This article originally appeared on GearBrain.com and was syndicated by MediaFeed.org.

 

zavatskiy / istockphoto

 

Featured Image Credit: depositphotos.com.

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