US EV Tax Credit Regulations Cause Confusion and Changes for Consumers and Automakers

Restrictions on which electric car models qualify for a federal tax credit of up to $7,500 have made buying an electric car more complicated. The Inflation Reduction Act has made buying such vehicles a lot more complicated, and the Treasury Department further tightened those rules this week by requiring that a certain percentage of the components and minerals in car batteries are sourced from the United States or in countries that are its trade allies. Just 11 electric cars from four automakers now qualify for the full tax credit, and several others can qualify for a partial $3,750 credit. The rules are already driving big changes in the buying and selling of electric cars, with some automakers whose models are no longer eligible now pushing leased electric cars.