BY ZACK BUDRYK
Changes to the federal electric vehicle (EV) tax credit are set to take effect Jan. 1, reflecting a push by the Biden administration to focus the financial incentives on domestically produced vehicles.
The changes to the tax credit, which tops out at $7,500, will exclude certain EVs that include internationally sourced components from eligibility, while for the first time allowing some buyers to access the credit right after buying an eligible vehicle.
These changes stem from a central provision of the Inflation Reduction Act (IRA), the sweeping climate and infrastructure law President Biden signed in 2022.
The provision barred vehicles including components or critical minerals from “foreign entities of concern” (FEOC) from being eligible for the credit. In November, the Biden administration issued rules for determining which entities fall under this disqualification. This includes companies fully or partially controlled by the governments of China, Iran, North Korea or Russia.
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