August 1, 2022 – Democrats and the Biden administration revived parts of the old Build Back Better agenda, specifically EV tax credits, in the Inflation Reduction Act, dubbed the IRA.
The bill removes the caps on the numbers of vehicles. Companies such as Tesla and General Motors had reached the previously 200,000-unit limit and Ford and Toyota are close to doing so as well. The $7,500 credit for a new EV is only available to individual buyers with an income of less than $150,000 or family income of less than $300,000. Customers with larger incomes would not be eligible for the credit.
Used battery-electric vehicles would be eligible for $4,000 tax credits, helping foster a market for used EVs. The tax credits are limited to individuals with incomes of less than $75,000 or family income of $150,000 for those filing joint returns.