On Friday, March 31st, the US Treasury Department announced new, more stringent EV tax rules which will reduce or eliminate existing tax credits on some zero-emissions vehicles. However, these changes do not go into effect until April 18th, 2023. Here are some of the highlights.
- The IRS EV tax credit guidance is for Section 30D of the Inflation Reduction Act and pertains to battery components and critical mineral sourcing requirements.
- This guidance DOES NOT affect the commercial clean vehicle provisions covered in Section 45W.
- Wheels’ clients are not affected by the incoming requirements, as long as they are eligible to take the tax credit under 45W.
- Section 45W does not have any limitations as to final assembly, battery components and critical mineral sourcing.
- It’s possible to take advantage of the Section 45W credit. Please reach out to your account manager for details on pricing and lease structure.
Finally, we highly recommend consulting with your internal tax team first to determine if your organization has enough tax liability to take advantage of the 45W credit (many companies are structured to have no tax liability at all).
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