Recently, electric vehicle advocates were shocked by the IRS’ list of qualified vehicles under the Biden administration’s Inflation Reduction Act (IRA). As per the current list, some variants of popular battery electric cars like the Tesla Model Y and the Ford Mustang Mach-E are not eligible to take advantage of the IRA’s $7,500 federal tax credit, even if hybrids like the Jeep Wrangler 4XE do, despite its 20 MPGe and all-electric range of 21 miles.
A good reason behind this was because the IRA currently divides its qualified vehicles as “SUVs/Trucks/Vans” and “All Other.” Vehicles in the “SUVs/Trucks/Vans” category are evaluated on a variety of factors such as weight, and are given a maximum price of $80,000. Those in the “All Other” category are given a $55,000 maximum price. In the case of the Model Y Dual Motor AWD, the variant was too light to qualify under “SUVs/Trucks/Vans” and too expensive to qualify for the “All Other” category’s $55,000 cap.
The IRA’s $7,500 federal tax credit is partly intended to promote the United States prominence in the EV sector, so shunning some of the most popular electric vehicles in the country was nothing short of ironic. It was then no surprise that in response to the IRS’ current qualifications, electric vehicle advocates have called for changes that would allow actual EVs that are designed for sustainability to qualify for incentives.
Among the most notable efforts pushed by the EV community so far was a Change.org petition, which called for the Inflation Reduction Act’s EV tax credit system to be fixed. The petition was initially posted by former Tesla employee turned YouTube host Farzad Mesbahi, who noted that the current system that disqualifies EVs like the Model Y in favor of hybrids is downright silly. The petition gained a lot of support, and as of writing, it has already accumulated a total of 44,849 signatures.
The Change.org petition noted that at best, the current EV incentive structure of the IRA is either negligent or incompetent, or at worst, corrupt. Thus, the petition suggested that the IRA could do one of two things: remove incentives for all hybrid vehicles and instead have them apply only to pure electric cars like the Ford Mustang Mach-E and the Tesla Model Y; or have the system apply its SUV or non-SUV rules fairly. The Model Y was essentially disqualified from the IRA’s $7,500 federal tax credit because of technicalities, after all, which is quite ironic since the vehicle is recognized by the NHTSA and the EPA as a small SUV.
Tesla CEO Elon Musk has spoken against the IRA’s current incentive structure, noting that it was bizarre the Model Y was being “penalized” for being “too mass-efficient.” Musk also called on EV supporters to comment on the current EV incentive structure of the IRA. It should be noted that Musk has noted in the past that he is against EV incentives overall, though now that one is coming, the CEO is pushing for fair rules.
Those who wish to sign up for the Change.org petition against the IRA’s current EV incentive structure can click here.
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