Say goodbye to the $7,500 Audi EV tax credits thanks to the new Inflation Reduction Act, which focuses on American-assembled vehicles & batteries.
Audi of America announced Friday that buyers of the company’s electric vehicles are about to lose the EV tax credits. These tax credits, a popular incentive of up to $7,500 on new EVs, are set for elimination once President Biden signs the Inflation Reduction Act (most likely tomorrow, August 16). Approved by Congress last week, this legislation provides $430 billion to fund climate, health, and other initiatives. The law, which revises IRS Tax Code 30D retains the $7,500 BEV credit. But vehicles assembled outside North America no longer qualify. Immediately.
As a result, only the Audi Q5 PHEV will qualify for the credit (at least for 2022). The bill also makes provisions for people who bought EVs but have not yet taken delivery of their vehicle. But once legislation is signed, new sales of Audi’s e-tron family will no longer receive the credit. As a result, Audi said the legislation “will have consequential impact on our business and to our consumers.”
On the Porsche side, the Taycan and the Cayenne, and Panamera plug-in hybrid vehicles will lose eligibility once the legislation is signed. “With respect to customers who placed vehicles on order and are still awaiting delivery, their credit eligibility depends on individual sales agreement, which is a matter between them and their independently owned and operated Porsche dealership,” a Porsche Cars North America spokesperson said.
Only Volkwagen’s ID.4 meets the criteria for the new EV incentives. Made in Chattanooga, TN, the ID.4 lists for $41,000, making it eligible for both the new and existing tax credit.
The European Union, South Korea, and many automakers roundly criticized this legislation. The EU also implied it could violate World Trade Organization rules. EU officials believe tax credits are a strong incentive for EV sales. Eliminating it puts EU companies that have invested in U.S. manufacturing at a disadvantage.
A Missed Opportunity for EV Adoption
The Alliance for Automotive Innovation, a trade group representing North American automobile manufacturers, said the legislation jeopardizes EV adoption. It estimates that 70% of the 72 EVs sold in the U.S. are ineligible under the new law. According to John Bozzella, president and CEO of the Alliance for Automotive Innovation, the tax credits are necessary to accelerate EV conversion. “This is a massive undertaking and government has a role to play when it comes to establishing the right conditions for global leadership and success.” He called the new legislation a “missed opportunity at a crucial time.” Additionally, the Alliance for Automotive Innovation estimates the changes will jeopardize a collective target of 40-50 percent electric vehicle sales by 2030.
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Mark Webb is fascinated by anything automotive and particularly loves cars that are unusual or have a good story. He’s owned a variety of cars from 60’s muscle, Japanese imports, and oddities like a VW Thing and Porsche 924. After 20 years in the automotive and tech industries, he’s a walking encyclopedia of car info and is always on the lookout for his next project or a good road trip.
