Ford Mustang Mach-E Tax Credit Eligibility

The Made in America Ford Mustang Mach-E is still eligible for a $7,500 tax credit—but potentially not for long.
Written by Sarah Gray
Reviewed by Brenna Swanston
Nov 18, 2022
The Ford Mustang Mach-E is still eligible for a $7,500 tax credit, but unless Ford makes significant changes to the model's battery construction, it won’t qualify for long.
Thanks to the Inflation Reduction Act of 2022, some electric vehicles (EVs) and plug-in hybrid vehicles (PHEVs) were removed from the list of those eligible for a tax credit. Luckily, the Ford Mustang Mach-E isn’t one of them—yet. That means if you’re interested in picking up the EV inspired by America’s first pony car, Uncle Sam is ready to hand you $7,500 until additional guidelines go into effect on Jan. 1, 2023.
Here to give you the low-down on the federal EV tax credit for the Mach-E is
Jerry
, the
car insurance
comparison app that can help lower your
Ford Mustang Mach-E insurance costs
. Plus, to make sure you’re getting exactly what you want, we’ll look at some great alternatives to the Mach-E.
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Is the Ford Mustang Mach-E still eligible for federal tax credit?

Yes, the Ford Mustang Mach-E is still eligible for the federal tax credit
The Inflation Reduction Act of 2022 made some pretty significant changes to the requirements for the federal EV tax credit originally introduced in 2010. Those changes seem mostly to be working in Ford’s favor. The automaker was quickly approaching the 200,000-vehicle sales cap that would mean the end of the incentive for Ford buyers, but, as of January 1, 2023, the sales cap will no longer apply.
Unfortunately, another bar to the tax credit still looms on the January 1st horizon—battery construction requirements. 

What you should know about the new federal EV tax credit requirements

Removing the vehicle-sales cap wasn’t the only significant change made to the federal EV tax credit requirements. In addition, new restrictions will be in place concerning buyer income, vehicle price, vehicle assembly, and, most notably, battery construction.
When it comes to buyer income and vehicle pricing, the restrictions are pretty straightforward:
  • For new vehicles, a single buyer must earn no more than $150,000 a year to qualify, and buyers who file jointly may only earn up to $300,000. Heads of household are limited to $225,000
  • For used vehicles, these numbers drop to $75,000, $150,000, and $112,500, respectively.
  • Price limits for new vehicles are $80,000 for SUVs, vans, and trucks and $55,000 for all other vehicles
  • The price limit for all used vehicles is $25,0000.
The restrictions on final assembly are also straightforward: It has to happen in the U.S., Mexico, or Canada. 
And now we come to the biggest issue not only for Ford but for all other manufacturers as well—battery construction. Starting in 2023, at least 40% of the EV or PHEV battery’s critical minerals must be recycled, extracted, or processed in the U.S. or in a country with which the U.S. has a free-trade agreement. Plus, the same U.S. or free-trade requirement will apply to at least 50% of the battery’s components.
Currently, no EV or PHEV on the market meets both of these requirements. In other words, unless battery manufacturing practices change significantly in the next two months, no vehicles will qualify for the full tax credit come January.

Other electric vehicle incentives

On the bright side, the federal tax credit isn’t the only incentive available to those interested in joining the EV and PHEV trend. Many states still offer rebates and tax credits for EV purchases, and electric companies and co-ops often offer rebates and incentives to EV buyers as well.

Is the Ford Mustang Mach-E still worth buying? 

So, even with the chance at the full tax credit, is the Ford Mustang Mach-E worth buying? That depends.
Regardless of the tax credit, the Mustang Mach-E is a solid option in the EV crossover segment. Car and Driver gives it 9/10 and puts it in third place among EV crossovers. Edmunds, on the other hand, gives it a “great” rating of 8.2/10 and ranks it in second place among all-wheel drive electric SUVs.
A key feature that impresses both critics is its Tesla-rivaling acceleration—which we should expect from an EV inspired by the iconic Mustang.
GT Performance
models launch from 0 to 60 in just 3.7 seconds. Add bold styling and up to 300 miles of range on a single charge, and you have three reasons why the Mach-E won Car and Driver’s inaugural
EV of the Year
award in 2021. 
Unfortunately, this jaw-dropping performance is only available on the top-trim GT and GT Performance models—models that start at an equally jaw-dropping $71,195 MSRP. Even with the full $7,500 tax credit, that’s a big chunk of change. Base models start at $48,194 MSRP for the
Mustang Mach-E Select
and increase by about $10K for each step up the trim ladder between the
Premium
at $56,275 and the California Route 1 at $64,875.
Bottom line: the Ford Mustang Mach-E is still worth buying. But some of you may have been asking: if the Mach-E won EV of the year in 2021, who won it last year? And that means you want options.
Let’s take a look at some other options that may be worth your while if the Mustang Mach-E doesn’t quite rev your engine.

What to buy instead of a Ford Mustang Mach-E

In recent years, the EV segment has grown significantly. Many of the vehicles in this segment
still qualify for the EV or PHEV tax credit
as well. In addition, the increased demand for EVs and PHEVs means it’s often fairly easy to find models at least a little—if not a lot—more affordable than the Mustang Mach-E.
Let’s take a look at some of your options.

If you want the best-rated EV all-around: 2022 Hyundai Ioniq 5

Starting price: $42,745
Possible tax credit: $7,500
Maximum range: 303 miles
Topping pretty much every car expert’s list for 2022 EVs is the
Hyundai Ioniq 5
. Not only does it take the honor of
Car and Driver’s EV of the Year for 2022
, but it also bagged a
triple win at the 2022 World Car Awards
, taking home the badge for World Car of the Year, World Electric Vehicle of the Year, and World Car Design of the Year. In the final round of voting, the Ioniq 5 was up against just two solid competitors—the
Kia EV 6
and, you guessed it, the Mustang Mach-E.
While piles of awards are great, you may be more interested in dollars. Yes, the Ioniq 5 does still qualify for the EV tax credit, and with a starting MSRP nearly $6K lower than the Mach-E, you’d be looking at significant savings both upfront and in fuel costs over time. In fact, you could select the top-trim Ioniq 5 Limited and still walk off the lot having spent almost $25K less than you would for the Mach-E’s top trim. Plus, you’ll only sacrifice one second of acceleration time getting from 0 to 60.
If you’re looking for one more reason to love the Ioniq 5, it also comes with the best new car warranty package in the business—a five-year/60,000-mile limited warranty, 10-year/100,00-mile powertrain warranty, and complimentary maintenance for three years or 36,000 miles.

If you want a more affordable EV Option: 2022 Chevrolet Bolt EUV

Starting price: $28,195
Possible tax credit: $7,500 after January 1
Maximum range: 247 miles
If you’re looking to join the EV trend, but you don’t have $40K to put on the line, you still have options—and a great one is the Chevrolet Bolt EUV. Chevy has surpassed the 200,000 vehicle sales cap, so the Bolt EUV isn’t currently eligible for the federal EV tax credit. However, if Chevy is able to sort out battery construction, they may be able to offer at least a partial credit again after Jan. 1. 
The best thing about the Bolt EUV is that, while it’s affordable, it’s not cheap. Buyers can opt for the top Premier trim (which we’d recommend), and add luxe features like leather upholstery, heated and ventilated front seats, and adaptive cruise control to an already-impressive lineup of standard features. 
Where you will sacrifice a bit is speed. If you’re looking for the perky acceleration of the Mustang Mach-E, you won’t find it here. The Bolt EUV managed a respectable 6.8-second 0 to 60 time, but that’s a far cry from the Mach-E’s blistering run.

If you’re not ready to go all-electric: 2022 Ford Escape PHEV

Starting price: $39,995
Possible tax credit: $7,500
Maximum all-electric range: 37 miles
Going all-electric can be a big step, so we understand if you’re not quite ready for it. Luckily, Ford has another option for you in the
Ford Escape PHEV
. Not only is this an excellent affordable alternative to the Mach-E but you’ll also still get a lot of savings on fuel costs.
After 37 miles of all-electric mode, it still gets 40 miles to the gallon combined in hybrid mode, which means huge fuel savings for you.

How to save on electric car insurance costs

Going electric is a great way to help the environment while saving yourself money on fuel costs. Unfortunately, if you’re planning to join the EV trend, you need to be ready for some pretty expensive insurance premiums. While the Ford Mustang Mach-E is still eligible for a tax credit to help offset your insurance costs, we wouldn’t blame you if you were still looking for ways to save.
If you’re looking for the lowest possible
Ford Mustang Mach-E insurance costs
that don’t sacrifice quality for savings, just head to
Jerry
. As
a licensed broker
partnering with more than 55 top providers, Jerry can show you money-saving options in just 45 seconds. How much savings, you ask? Jerry’s average customer saves over $800 a year on their insurance premiums!
“As a young person who owns a sports car and a high-end sedan, I couldn’t find quotes below a certain threshold. By using
Jerry
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