What You Need to Know About the Clean Vehicle Credit Plan 2022

After meeting the North American manufacturing requirement, an electrified vehicle has to have certain portions of its battery minerals either mined or processed in the U.S. or one of the nations with which the U.S. has a free trade agreement. Or it can use minerals from batteries recycled in North America. That’s for half the $7,500 maximum.

For the other half, the rest of the battery components have to be manufactured or assembled in North America. The rule says that automakers who want to qualify a model for half of the clean vehicle tax credit after Jan. 1 must show that at least 40% by value of its battery-critical minerals are from approved nations. That grows by 10 percentage points a year until topping out at an 80% requirement for 2028 and beyond.

It’s an either/or system, so getting the credit for meeting one set of requirements isn’t dependent on getting the credit for the other.

Need to get caught up on the Clean Vehicle Credit plan? Be sure to check out part 1 and part 2 of this article series.

 

*This article is for informational purposes only and is not intended to substitute for professional tax advice.

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