Among the many provisions included in the Inflation Reduction Act (IRA) signed into law by President Joe Biden over the summer are new EV tax credits, with thousands of dollars up for grabs per vehicle. Now, a new report is providing some insight into how consumers view these new EV credits.
Before diving into the report, it’s worth briefly summarizing the new EV tax credits included in the IRA. Simply put, EV buyers will be eligible to receive upwards of $7,500 in tax credit when purchasing an electric vehicle – however, that full $7,500 EV tax credit will only be available on models that are assembled in North America and which incorporate battery materials and components sourced from supply chains from within North America, or from a country with an established free trade agreement with the U.S.
The new EV tax credits also place price caps on which vehicles are eligible, with sedans, hatchbacks, and wagons capped at $55,000, and SUVs and trucks capped at $80,000. Filer income caps are also part of the equation, with single filers earning more than $150,000 AGI, head of household filers earning more than $225,000 AGI, and joint filers earning more than $300,000 AGI all ineligible for the credits. Used EVs are also eligible for credits, and include their own set of rules and requirements.
Now, in a new report from Cox Automotive, consumers are providing their opinions on the new IRA EV tax credits. Based on a Cox Automotive Mobility survey of 1,000 individuals, consumers are generally “somewhat familiar” with the new credits, with most getting their information from the dealer, automaker websites, government websites, or dealership websites. The majority of those surveyed also indicate that the new rules are general easy to understand, and that they will have a positive influence on the decision to purchase an EV.
Further consumer insights include a general consensus that the EV tax credits should only be available on non-luxury models made in the U.S., and that the credit should be available at time of purchase, not later as a tax deduction. Additionally, those surveyed indicate that the credits should only be available to buyers in a certain income range, and most believe that the new tax credits will ultimately benefit the U.S. economy.
The U.S. Treasury is now seeking input on the rule changes ahead of the issuance of guidance. Foreign governments and automakers are actively seeking to change the credit requirements to allow vehicles assembled outside the U.S. to be eligible.