For leased electric vehicles (EVs), the critical mineral requirement differs significantly from outright purchases due to IRS categorization and tax credit structure:
Leased EVs
Qualify under commercial vehicle rules (Section 45W) without needing to meet critical mineral or battery component requirements. Dealers can claim the full $7,500 credit for leased EVs regardless of sourcing origin.
Purchased EVs
Must meet two strict requirements to qualify for the full $7,500:
- Critical minerals: At least 40% (increasing annually) must be extracted/processed in the U.S. or a free-trade partner, or recycled in North America ($3,750 credit).
- Battery components: At least 50% (increasing annually) must be manufactured/assembled in North America ($3,750 credit).
This leasing loophole allows consumers to benefit from the full credit indirectly through potentially lower lease terms, bypassing mineral/battery sourcing restrictions that apply to purchased EVs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-critical-mineral-requirement-differ-for-leased-evs/
