In August 2022, the Kia Sorento plug-in hybrid electric vehicle (PHEV) was removed from the eligibility list for federal tax credits since it is not assembled in North America.
Since 2010, the U.S. federal government has offered tax credits to electric and hybrid car buyers, with incentives ranging from $2,500 to $7,500. The PHEV Kia Sorento,
Sportageall previously had tax credit eligibility, but per the new Inflation Reduction Act, these Kias no longer qualify.
The Kia Sorento PHEV may have been your car of choice for several reasons, but without the federal tax credit, you may be wondering if you should still buy one. Here, we’ll go over what tax credits or incentives the PHEV Sorento is still eligible for and list some competitors you may want to consider.
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Is the Kia Sorento still eligible for federal tax credit?
No. As of August 2022, the Kia Sorento no longer qualifies for federal tax credits from the IRS. Sorentos purchased between August 16, 2022 and December 31, 2022 were eligible for the late tax credit in 2022, but as of January 1st, 2023, they do not qualify.
In the past, Kia Sorento buyers could file a claim for the now-outdated federal EV tax credit, which was introduced in 2010 and covered up to $7,500 for new electric and hybrid car purchases. Automakers were subject to a cap of 200,000 EVs sold.
Teslawere the first manufacturers to meet the sales cap, thus eliminating them from the eligibility list.
While Kia has not reportedly hit the 200,000 production cap, the Sorento and other
Kiamodels are no longer on the PHEV tax credit list per the 2022 Inflation Reduction Act since they are not finally assembled in North America.
What you should know about the new federal EV tax credit requirements
The new Inflation Reduction Act introduces some pretty strict requirements for electric and hybrid automakers, putting the remaining federal tax credits slightly out of reach for some buyers.
To begin, the legislation removes the 200,000-vehicle production cap, providing more room for automakers that assemble their vehicles in North America. This means manufacturers like Tesla, GM, and Toyota can requalify—as long as their vehicles meet further requirements.
The act also adjusts the income requirements for credit eligibility. Independent car buyers will qualify if they make no more than $150,000 a year, heads of households can make up to $225,000 per year, and jointly-filing married couples can make up to $300,000 annually.
Luxury electric vehicles will not qualify since there are pricing limitations on the tax credit. Sedans under $55,000 and trucks, vans, and SUVs under $80,000 will qualify, meaning vehicles like the
Tesla Model Xwill not be eligible due to their high price tags. Additionally, used vehicles may be eligible for a credit if their price is capped at $25,000.
Lastly, automakers must meet battery construction requirements. EV batteries will need to be manufactured and assembled in North America and contain a specified amount of crucial minerals from a North American or U.S. free-trade partner nation.
Unfortunately, there are limited vehicles that currently meet these battery requirements, which could make federal tax credits hard to come by in 2023.
Other electric vehicle incentives
This news might be kind of upsetting if you were looking forward to a brand-new Kia Sorento PHEV on your driveway plus a tax credit.
Although the federal tax credit eliminates this popular PHEV for now, Kia is set to submit eligible vehicles to the IRS’s list in the coming years.
That said, there are numerous other incentives for electric and plug-in hybrid vehicles you might qualify for now, including state rebates and rebates or tax credits for home charger installations. Depending on your state, you could still reap some notable benefits from buying an eligible EV or PHEV.
New Yorkresidents could receive a rebate between $500 to $2,000 depending on the price of their electric vehicle or PHEV.
California electric vehicle incentivesinclude rebates up to $7,000, while
Florida electric vehicle incentivesoffer rebates ranging from as low as $100 in Kissimmee to up to $7,500 in
Is the Kia Sorento PHEV still worth buying?
So, you won’t receive a federal tax rebate if you buy a Kia Sorento Plug-In Hybrid in 2023. But this turbo SUV still has plenty to offer, like 32 miles of all-electric driving range, that might make it worth your while!
The Kia Sorento is a slightly pricier option in the plug-in hybrid class, with a $46,485 starting price for the 2022 model. Even so, it gets an 8.5/10 rating from Car and Driver and an 8/10 rating from Edmunds.
When it comes to its competitors, the Kia Sorento PHEV puts up a pretty good fight for value, especially considering its six-seat capacity compared to five-seaters like the Hyundai Santa Fe and the Toyota RAV4 Prime.
The Sorento’s turbocharged engine, 13.8-kWh battery, and electric motor support a smooth ride of up to 261 horsepower, and its steady handling gives drivers an easy time on the road. Technology and interior finishes are quite generous, offering a user-friendly and comfortable vehicle experience. And if you’re interested in PHEVs for their fuel efficiency ratings, you’ll be pleased with the Sorento’s 32 miles of all-electric range and EPA-estimated 34 mpg combined.
Key Takeaway The Kia Sorento Plug-In Hybrid could still be worth buying, but if its higher-than-average starting price seems too high without the federal tax credit in play, you may be better off buying a cheaper PHEV.
What to buy instead of a Kia Sorento PHEV
It’s hard to walk through any car dealership in 2023 without spotting an electric or hybrid SUV. But with the new amendments to the EV tax credit system, there are limited alternatives to the Kia Sorento that qualify for tax credits.
Luxury vehicles, SUVs, and trucks from automakers who hit their 200,000-vehicle sales cap are now re-entering the qualifying selection, but these might not be your best bet budget-wise. But fear not—there are still a few decently-priced PHEV SUVs to enjoy with or without the federal tax credit:
The federal tax credit qualifier: 2022 Ford Escape PHEV
Starting price: $36,950
Possible tax credit: $6,843
Ford Escape PHEVcould be eligible for federal tax credits throughout 2023 and into the coming years. Before and after tax credits, the Escape is a lot cheaper than the Sorento and features the comfort and performance of other favorable SUVs. With 37 miles of all-electric range and up to 40 mpg combined, the Escape also provides some class-leading savings on fuel.
But unlike the Sorento, the Escape does not have an all-wheel drive option, which is a main reason people often look for SUVs.
The fan-favorite PHEV: 2022 Hyundai Tucson SEL PHEV
Starting price: $36,695
All-wheel drive, 261 horsepower, and 35 mpg combined make this PHEV SUV an outstanding pick for value and efficiency.
Hyundai TucsonPHEV gets 33 miles from a single charge to its electric battery, which offers 80 MPGe combined. Its performance-oriented powertrain offers quick and smooth acceleration plus a comfortable and controlled ride with its responsive system.
If all of that doesn’t sell you, the Tucson also comes with well-appointed warranties—a five-year or 60,000-mile limited warranty, a 10-year or 100,00-mile powertrain warranty, and complimentary maintenance for three years or 36,000 miles.
The all-electric pick: 2022 Hyundai Ioniq 5
Starting price: $41,245
Maximum range: 303 miles
Ready for the pleasure and performance of a fully battery-powered SUV? The
Hyundai Ioniq 5and its reasonable price tag may be your best bet, especially since it won Car and Driver’s 2022 EV of the Year award.
Although the Ioniq 5 isn’t currently eligible for tax credits, its stylish and impressive presentation makes up for the lack of discounts off its MSRP. With a maximum driving range of 303 miles and up to 320 horsepower, the Ioniq 5 stands out for its unique body style and its smooth electric drive.
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