The automotive industry has been experiencing major changes. Popular automakers like Ford, Chevrolet, Toyota, Hyundai, and more are producing electric vehicles. Some of these electric cars and electric SUVs benefit from federal tax incentives. The Inflation Reduction Act of 2022 just introduced a refreshed federal electric vehicle tax incentive that removes the sales cap from the program. Did the government just help Ford win the electric SUV war?
The Ford Mustang Mach-E reaps the benefits of a new EV tax incentive
Prior to the Inflation Reduction Act of 2022, things were looking grim for electric vehicles that were approaching the tax incentive sales cap. The old incentive program begins to phase out the tax incentive once an automaker reaches 200,000 eligible units sold. After an automaker reaches the sales cap, the government gradually reduces the amount of money consumers can claim for EVs purchased from that brand until it is completely gone.
Tesla lost its tax credit eligibility after passing the sales threshold. Tesla buyers were once able to claim the full federal electric vehicle tax incentive. The incentive makes EVs much more reasonable. In fact, many consumers would avoid EV purchases entirely if not for the financial assistance that the tax credit provides.
The new federal electric vehicle tax incentive proposed as part of the Inflation Reduction Act of 2022 would help the Ford Mustang Mach-E retain its tax credit eligibility despite Ford’s stellar EV sales year. The Blue Oval got around 200,000 orders for the F-150 Lightning. The Mach-E is also very popular in its segment.
The 2022 Ford Mustang Mach-E starts at $43,895. After the tax incentive, the base model Mach-E Select’s starting price would be closer to $36,395. It gets 224 miles of driving range.
The new EV tax incentive gives foreign EVs the cold shoulder
According to CNBC, the new federal electric vehicle tax incentive excludes vehicles that aren’t made in North America. Qualifying vehicles also need to be made with a large percentage of parts sourced from America. This is great news for American EVs.
It isn’t great news for the popular Hyundai Ioniq 5 and Kia EV6 electric SUVs. The Hyundai Ioniq 5 is the World Car of the Year, but what if it loses its tax credit eligibility? If the Inflation Reduction Act of 2022 passes through the House of Representatives without changes, the Ioniq 5 could become much more expensive for Americans.
The Ford Mustang Mach-E has a huge advantage
The Ford Mustang Mach-E is one of the only competitive electric SUVs on the market that would be eligible for the new proposed federal electric vehicle tax credit. The Model Y would be eligible as well, but it’s no longer in the same price range as the Mustang Mach-E. The new incentive gives the Mustang Mach-E a huge advantage over competitors.
Read more about the Ford Mustang Mach-E in the next article below.