Stricter Rules to Reduce Number of EVs Qualifying for U.S. Tax Credit in 2024

Popular models like Tesla Model 3 and Ford Mustang Mach-E may lose eligibility due to new sourcing requirements, impacting the affordability of electric vehicles.

• New rules from the Biden administration will reduce the number of electric vehicles that qualify for a federal tax credit in 2024, making it more difficult for buyers to claim the subsidy.
• Popular models like the Tesla Model 3 and the Ford Mustang Mach-E may no longer qualify for tax credits due to stricter sourcing requirements, particularly regarding batteries made in China.
• Despite the stricter rules, electric vehicles remain the fastest-growing segment of the auto industry, with sales expected to rise another 32 percent in 2024.
• Automakers are still years away from breaking their dependence on China for batteries and essential materials like refined lithium.
• Only 10 electric cars will qualify for the full $7,500 tax credit in 2024, including the Chevrolet Bolt EV, Ford F-150 Lightning, and Tesla Model 3 Performance.

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