You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
The new rules are complicated. Here’s how to make sense of them if you’re shopping for an electric vehicle.
The Department of Treasury published new rules last year that will determine which new electric vehicles, purchased for personal use, will qualify for a $7,500 tax credit. They went into effect on April 18, 2023, and last for the next decade or so.
These new tax credit rules are complicated. The list of cars that qualify for the new tax credit can change from year to year — and even month to month. Many buyers in the EV market might have a few questions, including: Should I buy that new car now, or should I wait? Which cars qualify for the current tax credit, and which ones will earn the new one?
This is Heatmap’s guide to the new tax credit, why it matters, and what to keep in mind as you go EV shopping.
If you’re an ordinary American buying a brand-new EV to run errands and pick up the kids, these new rules apply to you. They will determine which cars you can get a federally funded discount on.
If you’re not buying a new car for personal use — because you’re getting it for your business, say, or because you’re buying a used EV — these new rules don’t apply to you. But you may qualify for other new subsidies. We get into those below.
And even if you are in that first category, you may discover it’s much cheaper to lease a new EV instead of buying it outright. We get into why below, too.
They completely change how the United States approaches the EV industry.
During the Bush and Obama administrations, the U.S. was focused mostly on getting automakers to begin to experiment with EVs. So it discounted the first 200,000 or so electric vehicles that each manufacturer sold by up to $7,500. If a company had cumulatively sold more than that number over time, as Tesla and General Motors eventually did, then the discount expired. By 2022, that had led to a peculiar situation where foreign automakers, such as Hyundai, could use the subsidy, while some of the largest American automakers couldn’t.
Now, U.S. policy is focused on two goals: (1) building up a domestic supply chain for EVs and (2) getting more EVs on the road. So the tax break is completely uncapped — any automaker can use it as many times as possible if they meet the criteria.
But many new requirements apply: Only cars that undergo final assembly in North America will qualify for any of the tax credit. Then, cars with a battery that was more than 50% made in North America will qualify for a $3,750 subsidy. And cars where at least 40% of the “critical minerals” used come from the U.S. or a country with whom we have a free-trade agreement will qualify for another $3,750 subsidy.
Those percentage-based requirements will ramp up over time. By 2029, for instance, 100% of a car’s battery and battery components must be made in North America.
Because Congress said so. The Inflation Reduction Act, which Democratic majorities in the House and Senate passed last year, mandated this change to the EV tax credit as part of its broad expansion of American climate policy.
Initially, fewer EVs will receive a subsidy under the new rules, Biden officials say. On a press call with reporters, a senior Treasury official argued that more cars will eventually qualify under the new rules than qualified under the old ones.
This year, at least 15 car or light trucks will receive some or all of the credit. Only some of those vehicles will qualify for the full $7,500 tax credit; some will qualify for a partial $3,750 tax credit. Here is the full list of qualifying models, along with the amount of the tax credit that they will earn:
• Audi Q5 TFSI e Quattro PHEV ($3,750)
• Cadillac LYRIQ ($7,500)
• Chevrolet Bolt ($7,500)
• Chevrolet Bolt EUV ($7,500)
• Chrysler Pacifica PHEV ($7,500)
• Ford Escape Plug-in Hybrid ($3,750)
• Ford F-150 Lightning, Standard & Extended Range ($7,500)
• Jeep Wrangler PHEV 4xe ($3,750)
• Jeep Grand Cherokee PHEV 4xe ($3,750)
• Lincoln Corsair Grand Touring ($3,750)
• Rivian R1S, Dual Large & Quad Large ($3,750)
• Rivian R1T, Dual Large, Dual Max, & Quad Large ($3,750)
• Tesla Model X Long Range ($7,500)
• Tesla Model 3 Performance ($7,500)
• Tesla Model 3 Long Range AWD ($3,500)
• Tesla Model Y AWD, Rear-Wheel Drive, & Performance ($7,500)
• Volkswagen ID.4 AWD PRO, PRO, S, & Standard ($7,500)
Some vehicles that earned the full tax credit in 2023, such as the Ford Mustang Mach E, don’t qualify for any benefit as of January 2, 2024.
Yes. A few examples: The Hummer EV, which costs more than $110,000 a piece, won’t qualify for either the new or old tax credit — it’s too expensive. And the Polestar 2 won’t qualify because it’s assembled in China.
Yes. Starting this year, the U.S. is preventing cars that receive too much manufacturing input from a “foreign entity of concern” — that is, China — from qualifying for anyof the tax credit. This has reduced the number of vehicles that qualify for the $7,500 bonus.
This year, the government will also allow buyers to refund their EV tax credit at the dealership. That means buyers can now get up to a $7,500 discount at the moment when they buy their car instead of waiting until they file their taxes in the following year.
Yes. A married couple must have an adjusted gross income of less than $300,000 a year, and a single filer must have an AGI of less than $150,000 a year, to qualify for any aspect of the subsidy. A head-of-household must have an income of less than $225,000 a year.
Yes. Under the proposed rule, cars must have an MSRP below $55,000 to qualify for the credit. Vans, pickup trucks, and SUVs must have an MSRP below $80,000.
Yes. The Inflation Reduction Act also included a new $7,500 tax credit for EVs used for any commercial purpose. The Treasury Department is expected to interpret that provision to cover leasing, but it hasn’t announced the guidelines for that rule yet, so we don’t know for sure.
But the provision will probably tilt new EV drivers toward leasing their car rather than buying it outright, because the dealer should — emphasis on should — offer relative discounts on leasing vehicles as compared to buying them.
Yes. There’s also a new $4,000 tax credit for buying a used EV that costs $25,000 or less. It went into effect on January 1, 2023, so you can go ahead and use it today.
But note that it has even stricter income limits: Married couples can only take advantage of it if they make $150,000 or less, and other filers if they make $75,000 or less.
Here’s the list of cars that qualified for the $7,500 tax credit before April 18, 2023, according to the Department of Energy.
• Audi Q5 TFSI e Quattro (PHEV)
• BMW 330e *
• BMW X5 xDrive45e**
• Cadillac Lyriq
• Chevrolet Bolt
• Chevrolet Bolt EUV
• Chevrolet Silverado EV
• Chrysler Pacifica PHEV
• Ford E-Transit
• Ford Escape Plug-In Hybrid *
• Ford F-150 Lightning
• Ford Mustang Mach-E
• Genesis Electrified GV70
• Jeep Grand Cherokee 4xe
• Jeep Wrangler 4xe
• Lincoln Aviator Grand Touring *
• Lincoln Corsair Grand Touring *
• Nissan Leaf
• Nissan Leaf (S, SL, SV, and Plus models)
• Rivian R1S
• Rivian R1T
• Tesla Model 3 Long Range
• Tesla Model 3 Performance
• Tesla Model 3 RWD
• Tesla Model Y All-Wheel Drive
• Tesla Model Y Long Range
• Tesla Model Y Performance
• Volkswagen ID.4
• Volkswagen ID.4 AWD, Pro, and S models
• Volvo S60 PHEV *
• Volvo S60 Extended Range
• Volvo S60 T8 Recharge (Extended Range)
* These cars don’t qualify for the full $7,500 subsidy, although they all receive at least a $5,400 tax credit.
** Only some BMW X5 xDrive45e vehicles qualify — it depends where the car was made. Check the VIN or ask the dealership to confirm it was made in North America before buying.
This story was originally published on March 31, 2023. It was last updated on March 5, 2024, at 10:00 a.m. ET.
Get the best of Heatmap delivered to your inbox:
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Has Plug Power pulled the plug on its upstate New York facility?
In 2021, top elected officials in New York state promised that Plug Power, a nascent company in the growing hydrogen industry, would build a large hydrogen fuel production facility in the Buffalo-Rochester area. It was supposed to make the state an industry leader.
Today, the project is looking more like a warning sign about the perils of being a first-mover in the unproven hydrogen business.
It wasn’t supposed to be this way. Plug Power, an American hydrogen and fuel cell producer founded in 1997, believed it would capitalize on rising demand for the liquid fuel when it broke ground at its hydrogen production facility at Genesee County’s Science, Technology and Advanced Manufacturing Park in 2021, a project known colloquially as STAMP. Heavy polluting industries like steel and transportation were chomping at the bit to strike supply deals for hydrogen, a liquid fuel that produces no carbon when burned. And this New York plant would on paper be particularly attractive from a climate perspective: It would be powered by hydroelectric dams at Niagara Falls, offering a potential carbon reduction of an estimated 14,000 tons of CO2 per year. It would also be the largest project of its kind in the Northeast.
Three years later and the project appears to be on ice, according to a phone call recording between New York county officials and a real estate developer that was obtained by Heatmap News.
Construction stopped in January, per the call, as did work Plug Power promised to do on an electrical substation that will also power a neighboring semiconductor manufacturing plant. Now energy-hungry data center developers are bidding to pick up the substation work instead in exchange for a spot at STAMP and access to some of the remaining hydroelectricity, and county officials are looking at buying Plug Power’s electrical equipment.
It is unclear whether the hydrogen production plant will ever be completed.
“They’ve put things on hold and now we’re coming to pick up the pieces,” Chris Suozzi, an executive vice president at the Genessee County Economic Development Authority, told one bidder – PRP Real Estate Management – on a call last month. PRP taped the call and shared it with us after it was first reported by local news nonprofit InvestigativePost. Suozzi also said on the call: “They’re not ready to go. They’re on pause. We don’t know what’s going to happen with them at this point.”
The New York Plug Power plant’s problems should be familiar to anyone in the climate tech startup space but for the unfamiliar, the company’s rapid growth seems to have run headlong into struggles with cash. A year ago Plug Power said in an investor filing there was a “substantial” concern the company may not have “sufficient funds to fund [its] operations through the next 12 months.” So problematic are Plug’s financial woes that they’ve become a political target; after the Energy Department offered a $1.6 billion conditional loan commitment to Plug for building hydrogen production plants, Republicans in Congress called for an inspector general investigation into the move.
But the New York production facility won’t benefit from the potential loan either. We’ve learned from two sources familiar with the matter that the project is not included in its potential loan application currently pending before DOE.
Then there has been the rollout of the Inflation Reduction Act. Even though the project relies on carbon-free hydropower, it may not qualify for the IRA’s hydrogen production tax credit because of proposed requirements for fuel to rely on new renewable energy sources (known as “additionality”). This has been a major sticking point in implementation of the credit, and Plug Power is quoted in InvestigativePost last week linking the work stoppage at the production facility on waiting for the final regulation implementing the credit. This is even as the company uses the yet-to-be finalized credit in its financial analyses for other hydrogen facilities in operation today, like this one in Georgia.
Environmental justice issues have also been a drag on development. The native Tonawanda Seneca Nation is opposed to the entire industrial park because of the resulting impacts on wildlife, noise and the visual landscape. In April, the Fish and Wildlife Service revoked a necessary permit for a wastewater treatment pipeline that would be used by companies at the park.
Earthjustice attorney Alex Page – who is working with the Nation to fight the project – told me the tribe was told last year by the Energy Department that Plug Power had withdrawn the New York site from its loan application. The Nation will continue to fight the project and DOE’s loan financing to Plug Power on the chance that money could be reprogrammed to the industrial park. Page said: “The Nation remains very, very much opposed.”
We sent Plug Power multiple requests for comment as well as Suozzi. A representative for Plug Power declined to answer questions about the project. I got a text from a number listed for Suozzi asking to chat later, but I didn’t hear back before publication.
The week’s biggest fights around renewable energy
1. San Diego County, California – The battery backlash just got stronger after the city of Escondido, California, indefinitely banned permits to the entire sector in reaction to a battery fire last month.
2. Waldo County, Maine – The potential first floating offshore wind assembly site in America is now one step further in the permitting process, after Maine’s Department of Transportation released a pre-application alternatives analysis required for federal environmental reviews.
3. Dickinson County, Kansas – This one county may be a bellwether for future problems in Kansas, a state with many existing wind farms — and even more potential — but also a lot of opposition.
4. Washoe County, Nevada – The company behind the Burning Man festival will be acquiring nearby geothermal energy leases, in a settlement resolving litigation that had the high-profile naturalist escape challenging access to a renewable energy resource.
Here’s what else we’re watching right now…
In North Carolina, the Kerr Lake Solar project proposed by Cypress Creek Renewables is facing its own apparent local onslaught at community meetings.
In California, Capstone and Eurowind Energy are seeking permission to build a long-duration battery storage facility in Alameda County.
In New Jersey, a coalition of shore towns and opposition groups fighting the EDF-Shell Atlantic Shores offshore wind farm have issued a new missive criticizing state financial benefits to the project.
In New York, the town of Oyster Bay looks like it’ll be extending its moratorium on BESS for at least another six months.
In Pennsylvania, a Pivot Energy solar farm also has some local organizing in the way.
Why alarm bells are ringing in the renewable energy ecosystem, plus more policy news
IRA on the mind – The renewable energy ecosystem is starting to really sound alarm bells about the November election and the risks of what they’re calling a “clean energy plan repeal” – e.g. scrapping IRA credits and carbon pollution rules.
No Golden climate bill – However, if Kamala Harris and the Democrats do win in November, I’m bearish on the odds of another big piece of renewables stimulus passing through Congress next term.
Data center moratoriums – Energy demand for tech may be a driver of renewables development across the country, but data centers are starting to face moratoria fights of their own.
Here’s what else we’re watching…
In Illinois, the Solar Energy Industries Association and American Clean Power are rallying behind comprehensive decarb stimulus legislation.
In Louisiana, voters going to the polls will decide whether to increase revenues from offshore energy – including wind – that go to coastal restoration.