Even EV Leases Now Qualify For Tax Credits According To The Feds

The US Treasury Department has confirmed that consumers who lease electric vehicles instead of financing them will also be able to qualify for up to $7,500 in commercial clean vehicle tax credits. The new rule takes effect on January 1, 2023. Why is this a big deal, other than giving consumers greater flexibility? Because it allows for EVs built outside of North America, such as theHyundai Ioniq 5andKia EV6,成为合格的税收抵免.

This was amajor source of controversy in South Koreaand elsewhere following the Biden administration's $430 billionInflation Reduction Act(IRA) passed last August. The law ended that $7,500 tax credit for EVs built outside the continent. Hyundai Motor Group was very upset by this and felt betrayed, especially since it already has a major production plant in Alabama and the recently announced electric vehiclebattery manufacturing facility in Georgiathat will begin construction shortly.

The European Union, Japan, and other countries also expressed their dissatisfaction with the law. Fortunately, the federal government listened to these grievances and devised a fair solution. Critics of the IRA, such as Toyota, previously claimed that "the lack of criteria to qualify for (commercial credits) could undermine the IRA's goals to expand domestic production of EV batteries and maintain America's energy independence," perReuters.

The law also ends the 200,000-vehicle per manufacturer cap that affected General Motors and Tesla. Prior to the IRA's passing, both automakers' customers had become ineligible for the tax credit, another major source of contention that's since been resolved.