Last year’s Inflation Reduction Act provided a federal tax credit of up to $7,500 to use toward an EV. Under the rules, a dealer can apply that credit to any leased electric vehicle, no matter where it's made, to reduce a customer's monthly payment.For buyers, only EVs made in North America qualify for the full tax credit. And only 10 of the 49 electric vehicles for sale in the United States this year meet that requirement.
Geoff Pohanka, president of a 21-dealership group in Maryland, Virginia and Texas, said he is anticipating an increase in leasing. Buyers, he predicts, will increasingly recognize that the tax credit will help defray the typically substantial cost difference between an EV and a similar gas-powered vehicle.
To qualify for the tax credit, a car cannot cost more than $55,000. SUVs, pickups and vans can't exceed $80,000. And a buyer's gross income must be no more $150,000 if single, $300,000 if filing jointly and $225,000 if head of a household. "The administration continues to ignore the purpose of the law, which is to bring manufacturing back to America and ensure we have reliable and secure supply chains,” he said in a statement.
“Eligibility for the commercial vehicle credit is a straightforward reading of the Inflation Reduction Act as written by Congress and application of longstanding tax law regarding leased assets," Ashley Schapitl, a spokeswoman, wrote in a statement."There was no room for Treasury interpretation.” Hyundai is offering to lease an Ioniq 5 SE rear-wheel-drive EV for $499 a month for three years, though the customer must put down nearly $4,000. Buying the same EV would cost $865 a month for five years at the average new-auto loan rate of 7%.