EV Tax Credits Are Getting More Complicated—Find Out Why

Learn more about the recent revisions to the federal EV tax credit system, and why it’ll make getting credits harder for current and aspiring EV owners.
Written by Jason Crosby
Reviewed by Kathleen Flear
Aug 28, 2022
The federal tax system is notoriously complex—and now
tax credits are even harder to understand after recent revisions have adjusted some of the rules. Despite the confusion some changes may bring, EV tax credits are definitely worth it. So, what's changed? 
Adjusting to change can be tough—but Jerry’s on your side. If it feels like you’re getting overcharged for your current
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EV tax credits were adjusted recently

One of the
Biden Administration’s
biggest successes has been the passing of major environmentally-protective legislation. One of the most recent wins involved the Inflation Reduction Act, as it’s been dubbed, which, according to
Roll Call
, continues to support green energy programs and vehicles. 
After contention between a primarily unified democratic body and a more hard-nosed Joe Manchin (D-WV), the bill passed, but not without taking a major swipe at the available EV credits for American car consumers.

What adjustments were made to the federal EV tax credit incentive? 

Now, it’ll be harder for Americans to receive their EV tax credit. That’s because the bill will pass a mandate into law that requires the EV’s parts to be made in America, otherwise the vehicle is ineligible. This eliminates most carmakers from having EVs that qualify for the credit. 
Predictably, this has caused other carmakers to go ballistic as they are now urging Congress to change the new regulations surrounding EV tax credits. Despite this bad news, though, there’s a bright side.

Were there any good changes made?

Two definitively positive changes were made to the EV credit system in the Inflation Reduction Act. The first is that the 200,000 unit EV cap that was placed on U.S. carmakers has been dropped. This prevented GM, Tesla, and other companies from having EV models that are eligible for tax credits, simply because they’ve reached their limit. 
The second? Although there is a mandate that specifies only EVs with American-produced parts are eligible for credits, the bill offers billions of dollars to support the U.S. EV
supply chain
and green energy development programs. 
This money will help bolster the Biden Administration’s goal to reduce America's dependence on China for manufactured parts like batteries and raw materials such as lithium.

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It’s unclear where and when carmakers will be able to change any new limits on EV tax credits, but we do know one thing: If you want to save money on car insurance, the
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