The new electric vehicle eligibility rules set out in the Inflation Reduction Act (IRA) removed electric vehicles assembled outside of North America, including the Ioniq 5, from the federal clean vehicle credit.

There has been a fair amount of pushback to this bill, as

Hyundai

is dedicated to its American market and has invested $5.5 billion in a plant in Georgia that will produce batteries and EVs. Time will tell if an agreement will be made to put the Ioniq 5 back on the list of eligible EVs.

Bottom line: Due to rules set out in President Biden’s Inflation Reduction Act of 2022, the Hyundai Ioniq 5 is no longer eligible for a federal EV tax credit.

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

Electric vehicles with final assembly completed in North America have more hoops to jump through to qualify for the new federal EV tax credit. The new federal EV tax credit requirements include:

Income limits: Qualifying single buyers must make under $150,000 a year, while those filing jointly must make under $300,000 annually.

Price caps: As of 2023 EV sedans under $55,000 will qualify for tax credits, while larger new vehicles, like pickup trucks and SUVs will need to sell for under $80,000. The used vehicle price cap is $25,000, regardless of the car’s body type.

Battery material restrictions: EV batteries must contain a certain percentage of materials sourced from North America or a U.S. free-trade partner—plus, the battery has to be made in North America. There are currently no EVs that match these requirements.

Manufacturing cap: The 200,000 vehicle cap for automakers still applies.

Other electric vehicle incentives

The Hyundai Ioniq 5 may not be eligible for the federal EV tax credit, but there are other state incentives and rebates for electric vehicles and plug-in hybrids that reduce local emissions. Some of these programs will provide a rebate if you purchase an EV or will help with the cost of installing or upgrading a home charger.

Examples of state-level EV tax rebates and incentives include:

California’s electric vehicle incentive

: Includes rebates up to $7,000

Florida’s electric vehicle incentive

: Provides a $100 utility rebate and tax credits up to $7,500.

The Hyundai Ioniq 5 is still a good buy

The Ioniq 5 is undoubtedly an excellent EV crossover option. The 2023 Ioniq 5’s starting price of $41,450 MSRP puts it in the middle of the pack when it comes to EV affordability: about half the price of a luxury Polestar 3 SUV, but pricier than a Volkswagen ID.4 or Chevrolet Bolt.

Car and Driver awarded the electric SUV (EUV) an Editors’ Choice accolade and named it the #1 EV of the Year for the 2022 model. Key features include:

Quick charging time

303-mile maximum driving range

Distinctive design

Available AWD

The Ioniq 5 is a top choice if you’re in the market for a new EV. But if the sticker price is a little daunting, or even if you just want to cover all your options before heading to the dealership, here are some alternatives.

MORE:

How long does it take to charge the Hyundai Ioniq 5?

What to buy instead of a Hyundai Ioniq 5

It seems like everyone from

and

has an EV or PHEV on the market for the 2023 model year. But which models can compete with the Ioniq 5, and are any of them eligible for a federal tax credit?

If you’re looking for an EV the IRS reports will

still qualify for federal tax credits

, these are some options you’re likely to encounter:

Luxury vehicles, like the Cadillac Lyriq

Trucks, like the

Ford F-150 Lightning

SUVs, like the Genesis GV70, Mazda CX90, and

Tesla Model Y

With a few options on the table, let’s consider the models that are the best alternatives for the Ioniq 5.

MORE:

The best affordable electric cars in 2022

If you really want the federal tax credit: 2022 Ford Mustang Mach-E

Starting price: $44,995

Possible tax credit: $7,500

The

Mustang Mach-E

is currently on the eligibility list for the federal EV tax credit. The Mach-E is a striking crossover with between 211 and 305 miles of range, depending on the battery pack and motors you choose.

With this athletic battery electric SUV, you’ll also get suave interior features like:

Customizable ambient lighting

Heated front seats

Heated steering wheel

Wireless charging

Panoramic sunroof.

Even though it has a higher price tag than the Hyundai Ioniq 5, the tax credit can help offset the cost, leaving you to enjoy your sporty, sophisticated, and eco-friendly Mach-E.

If you just want a great EV: 2022 Kia EV6

Starting price: $42,695

The

Kia EV6

is the natural rival of the Hyundai Ioniq 5. Even though the two models share the same ride platform and electronic components, there are still some major differences. With a sleeker build, more in-cabin storage, and upscale features for a lower price point, the EV6 has a lot to offer.

The

Kia

EV6 also offers a more extended range than the Ioniq 5:

Rear-wheel drive with the standard battery: 232 miles

All-wheel drive with the long-range battery: 274 miles

Rear-wheel drive with the long-range battery: 310 miles

MORE:

Everything you need to know about Kia electric cars

If you’re open to a plug-in hybrid: 2022 Toyota RAV4 Prime Plug-In Hybrid

Starting price: $30,910

Maximum range: 42 miles

Instead of going full EV, you may want to consider a plug-in hybrid (PHEV) like the

Toyota RAV4 Prime

. Not only is the price tag a little easier to swallow, but you’ll have more flexibility when it comes to how you want to power your SUV.

Although Toyota EVs and PHEVs no longer qualify for the federal tax credit—having exceeded the eligibility cap—there’s still a lot to enjoy about the RAV4 Prime. Standard features include:

Apple CarPlay and Android Auto

Onboard Wi-Fi hotspot

Lane-departure warning with lane-keeping assist and adaptive cruise control. Y

You’ll also save tons on gas money with an EPA rated fuel economy of 94 MPGe combined. For a more affordable and spacious option, the RAV4 Prime should be on your radar.