Dealers In the Dark About EV Tax Credits: Here’s What You Can Do
With the Inflation Reduction Act EV tax credits to purchase an EV being so murky, there is a lot of confusion. And not for buyers, but also for dealers. Some shoppers have blamed dealers for shady misinformation regarding the credits. Maybe, or maybe not. But for the most part, most dealers play it carefully to make sure it is right. But without much guidance from the feds, it might seem like dealers are being sneaky even when they’re not.
What’s causing EV tax credits confusion?
Keeping the credit regulations so confusing is partly due to the Treasury Department. Mineral and battery element requirements were to have been completed by now. But in typical government fashion, it didn’t and is now saying the numbers will come sometime in March.
John Luciano of Street Volkswagen in Amarillo, Texas, told Automotive News it tells customers it doesn’t know how the eligibility works. “It’s not always the best answer, but it’s honest. We’re too afraid of getting it wrong.” Many dealers now say they advise talking to buyers’ own tax accountants first.
Is there another way to get the EV tax credits?
But until things become untangled, what can you do if you’re out to buy a new EV before March or April? Some have suggested leasing rather than purchasing an EV. The Treasury Department says that the 45W credit doesn’t go to the lessee, but to the lessor. It is then applied to reduce the customer’s monthly lease rate.
So there are other ways to get the benefits of the EV credit now without purchasing it. And it might be the safest way until mineral and battery component guidance gets released. “The implementation strategy is currently nothing short of a mess, effectively opposing the goals of the legislation in many instances,” Ohio Automobile Dealers Association president Zach Doran told Automotive News. “They’ve made the rules and regulations incredibly confusing for both dealers and consumers alike. I’d liken it to handing Olympic champion Michael Johnson his gold shoes and then tying a piano to his back.”
Is it the same confusion to buy a used EV?
While the new EV calculations are in the air, recently MotorBiscuit covered what might be the best way to determine eligibility online for a used EV, and it’s free. Used EVs meeting certain conditions are eligible for a $4,500 tax credit. On the Recurrent Auto website, you plug in the VIN number for a used EV that interests you and calculate its eligibility. Besides that, it can also determine if your income and certain other factors make you eligible for the EV credit.
So there is another way to work around the EV credit confusion if you’re wanting an EV now. And as a reminder, when it comes to used EV prices that seem too good to be true, may the buyer beware.