With the recent passing of the federal Inflation Reduction Act (IRA) and the Massachusetts climate bill, An Act Driving Clean Energy and Offshore Wind, there are now several incentives in place to help transition the U.S. and Massachusetts towards zero-emissions vehicles. However, in the short term it’s become slightly more complicated to get a rebate for an electric vehicle due to changing eligibility requirements. The Green Energy Consumer Alliance explains some of the changes, and we will continue to provide updates as we learn more:
Inflation Reduction Act:
- Already in effect:
- You can still receive an up to $7,500 tax credit for the purchase of an EV, but effective immediately, only vehicles with final assembly in North America are eligible for the Clean Vehicle Credit. (See list of eligible vehicles below).
- In effect on January 1, 2023:
- SUVs must be under $80k and sedans and hatchbacks must be under $50k to be eligible.
- Consumers will have to make under $300k filing jointly and under $150k filing individually in order to qualify.
- Instead of calculating the tax credit based on the battery size, the amount of the tax credit will be based on where the battery minerals and components are sourced and assembled. It is unclear at this point which vehicles will still be eligible for these credits after Jan 1, 2023.
- There will be no more 200,000 unit caps on car manufacturers, so companies like Tesla and Chevy will be eligible for the federal tax credit again as long as they meet the other eligibility criteria.
MA Climate Bill:
- Current: $2,500 tax credit for the purchase of an EV in Massachusetts
New: $3,500 tax credit for the purchase of an EV in Massachusetts, plus an additional $1,000 for trading in a gas powered vehicle – it is unknown when this will go into effect.
Read a more in depth explanation by the Green Energy Consumer Alliance and see below for a list of vehicles that are still eligible for the Clean Car Credit for the remainder of the year.
Eligible Vehicles until January 1, 2023 (PHEV = Plug-in Hybrid EV):
- 2022 Audi Q5 PHEV
- 2022/23 BMW 3-series PHEV 330e
- 2022 BMW x5 xDrive45e
- 2022 Chrysler Pacifica PHEV
- 2022 Ford Escape PHEV
- 2022 Ford F-150 Lightning
- 2022 Ford Mustang Mach-E
- 2022 Ford E-Transit Van
- 2022 Jeep Grand Cherokee PHEV
- 2022 Jeep Wrangler PHEV
- 2022 Lincoln Aviator PHEV
- 2022 Lincoln Corsair PHEV
- 2022 Lucid Air
- 2023 Mercedes EQS SUV
- 2023 Nissan Leaf
- 2022 Rivian R1T
- 2022 Volvo S60 T8 PHEV