Five Main Metrics to Consider
- Your income: The new laws are meant to give tax credits to the people who need them—the lower income groups. With that in mind, there are income caps. A person filing taxes as ‘single’ can have no more than $150,000 modified adjusted gross income (AGI). A couple filing jointly has a cap of $300,000 AGI.
- Country where the truck was assembled: To qualify, the vehicle must be assembled in North America. This added requirement cuts the list of all eligible EVs down substantially.
- Where battery materials were sourced: This is an area where things can get fuzzy, and you may want to check with your dealer. The general rule is that battery materials must be sourced from countries with free trade agreements with the U.S. or be sourced or recycled in North America.
- The price of the truck: EV Trucks have a price cap of $80,000 in the new bill to qualify.
- Manufacturers’ market cap: Though some EV trucks meet the other criteria, they may have already used the 200,000-unit market cap for 2022 and will not be available until 2023. The IRA removes the market cap for the number of models sold after this year.
In this article we will explore the new rules created by the Federal Inflation Reduction Act (IRA), and what you can expect when purchasing an EV truck. We will also take a look at which EV trucks’ tax credit status falls within the rules, and if you can still receive a tax credit.
The Rules for an EV Truck to Qualify for Tax Credits
As with most government plans, the IRA is complicated. So, let’s try to simplify it and see which EV trucks will still qualify for the tax credit under this new bill. We’ll boil it all down to get a good idea if your truck qualifies, so you can be sure.
One thing that is straightforward is the tax credit amount. The credit is $7,500 for new vehicles that qualify. On a used EV truck, the credit amount is $4,000, or 30% of the sale price, whichever is lower. The used vehicle must be bought from a dealer.
Which 4 EV Trucks Still Qualify in 2022?
There are still EV trucks that qualify for the tax credit for the remainder of 2022. We’re talking about pick-ups here, so if you miss your SUV or van on the list, we will cover those in another article.
Keep in mind that your adjusted gross income plays a role in your amount eligibility.
Note: Although all these trucks qualify, availability from the manufacturers is limited. You may want to look at how the new laws affect qualifications moving into 2023 and 2024. We will cover that in more detail as we move along in this article.
The base model Rivian R1T comes in under the new $80,000 price cap, but be careful with your options and trim package as you can quickly jump that level.
Rivian seems to be your best bet on getting an all-electric pick-up in the near future. You’ll need to decide what you want and get on a waiting list ASAP to secure your place. If you have a binding deposit or agreement signed, you can still receive the tax credits moving forward.
Customers already on waiting lists appear to be getting deliveries into the Fall of 2022, but it’s unclear when many of them got on the waiting list initially. With all these truck models on the list, one thing keeps coming up—if you’re serious, you better get the ball rolling.
Chevrolet Silverado EV
The Chevy Silverado EV is definitely a very good electric version of the gas model, with a price tag of $39,900 MSRP for some upcoming models in 2023 and 2024.
This is a highly rated electric pick-up and worth calling your dealer to get on the waiting list if you’re serious about eco-friendly driving in the future.
Chevrolet has been around a long time and can navigate the waters of legislation and manufacturing concerns with solid experience. The consumer may just have to exercise some patience and let the issues work themselves out over time.
The Chevy Silverado EV definitely meets all the criteria for the tax credit but, like the other brands, be aware of the options and the trim packages you choose.
Ford F-150 Lightning
As of this writing, the F-150 Lightning is unavailable to the public and we’ll have to see what the predictions are for 2023 and beyond. From our research, the 2023 Lightning will be reserved for large fleet buyers, so you may be waiting for the 2024 models.
Another thing to consider with the F-150 Lightning, as with other brands, is how fast the higher-end models get disqualified for going over the price limit.
On the positive side, this could actually be a benefit for lower-income consumers who can take advantage of the tax credit by staying in the base model range.
As one of the best-selling pick-ups in the U.S. for over 40 years, this electric model at just $39,974 is an attractive choice at a qualifying price.
This Back to the Future-looking design certainly stands out from the rest of our list. Its space-age styling is something to behold. With a price of $39,000 to $69,900, it makes the cut in the price metric. Tesla is purporting delivery and mass production in 2023, but we shall see. With Tesla located in Austin, TX, the North American requirement for manufacturing is covered.
The plan to be self-sufficient in sourcing battery material is supposedly a couple of years off, and the fact that Tesla reportedly gets a lot of lithium from a Chinese company could disrupt its tax credit qualifications in the future.
It’s fair to say with Tesla’s ability to solve big problems that this issue is being addressed. Unfortunately, Tesla’s efforts to source materials outside China may be focused on Africa and Bolivia, still making the Cybertruck ineligible under the new law.
Which Additional EV Trucks Will Qualify in 2023?
There are a lot of changes that will come into play on January 1st, 2023.
As of January 1st, 2023, the 200,000-market cap will be lifted, allowing some models, like the Silverado EV, to qualify, while the GMC Hummer pick-up will definitely not make the cut unless the base price is reduced significantly.
Some other players are entering the market in the near future and appear to make the cut for tax credits. Keep an eye out for EV pick-ups from Ram, Lordstown, Atlis, Bollinger, Canoo, and Hercules in 2023 and 2024.
What Does the Future Hold for Federal EV Truck Tax Credits?
This, of course, will depend on many factors, including the rules already laid out in the IRA.
The growing percentage of the market that EVs have taken and the government determining that the sector needs more incentives will also play major roles. And, don’t forget about changes in administrations, as such incentives could potentially vary in the future.
This is certainly a slippery slope that will require innovation from the auto companies and strong leadership in Washington. Let’s also not forget charging station infrastructure and the dubious range of some EV trucks. Electric vehicle enthusiasts may want to consider some other options.
A Few More Things to Consider on EV Truck Tax Credits
Although these trucks all still qualify, and the idea of a tax credit for going electric sounds great, the reality of owning and driving one of these excellent trucks seems to be far into the future if you haven’t already got on the bandwagon.
As we found from our research in another article, Ford plans a run-rate of 150,000 F-150 Lightnings in 2023, but the majority will go to fleet buyers.
It appears that the people who really need the tax credit—low-income buyers—won’t be the ones getting access to the product in a lot of cases.
The entire process of getting an EV truck tax credit is a vague affair. Considering the manufacturer’s uncertainty on production and the shifting federal regulation, you would be wise to consult with a professional advisor or dealer.
With the mission of protecting the environment as a backdrop, it’s still very difficult for this researcher to call this anything but a poorly thought-out, uncoordinated fiasco. Hopefully, the government and the manufacturers of these trucks will get on the same page. Keeping the mission of addressing climate change on the docket should be priority one.