Last month, the U.S. Treasury Department and the Internal Revenue Service released proposed guidance that identified how tax credits will be assessed on electric vehicles such as pickup trucks.
The Notice of Proposed Rulemaking (NPRM) explains how manufacturing sourcing will affect the amount of a tax credit available under the Inflation Reduction Act. The law requires that eligible vehicles undergo final assembly in North America. The NPRM applies to pickup trucks placed in service on or after April 18, 2023, and limits the Manufacturers Suggested Retail Price (MSRP) to $80,000.
Pickup truck EV credits
Here’s how pickup trucks and vans fare under the new rules:
- Ford Lighting, model year 2022-23: $7,500
- Ford Transit, model years 2022-23: $3,750
- Chevrolet Silverado, model year 2024: $7,500
- Rivian, model year 2023: $3,750
- Lordstown Endurance: n.a.
- Ram 1500 REV: n.a.
See also: ICE dominates pickups, but electrics proliferate
The amount of the credit depends on where the manufacturer obtains “critical minerals” and battery components. Full sourcing allows the pickup buyer the full $7,500 credit, and meeting one of the two sourcing requirements cuts the credit in half, to $3,750. Credit information is available at FuelEconomy.gov.
The Inflation Reduction Act’s critical minerals requirement mandates the percentage of battery minerals that must be extracted or processed in the United States or a country with which the U.S. has a free trade agreement. Minerals could also be recycled in the U.S. For 2023, that percentage is 40 percent, and it escalates each year until reaching 80 percent in 2027.
The battery requirement also mandates percentages of value of the battery components that must be manufactured or assembled in North America. For 2023, that percentage is 50 percent; it escalates each year until reaching 100 percent in 2029.
