To qualify for the full $7,500 tax credit under the Clean Vehicle Credit for vehicles purchased in 2023 or later, a new electric vehicle must meet both battery components and critical minerals requirements. Here are the specifics:
Battery Components Requirement
- Manufacturing Location: The vehicle’s battery must have a portion of its components manufactured or assembled in North America.
- Percentage Requirements by Year:
- 2023: 50%
- 2024 and 2025: 60%
- 2026: 70%
- 2027: 80%
- 2028: 90%
- 2029 and later: 100%
- Credit for Meeting This Requirement: $3,750.
Critical Minerals Requirement
- Sourcing Location: The battery’s critical minerals must be extracted or processed in the United States, a U.S. free-trade agreement partner, or recycled in North America.
- Percentage Requirements by Year:
- 2023: 40%
- 2024: 50%
- 2025: 60%
- 2026: 70%
- 2027 and later: 80%
- Credit for Meeting This Requirement: $3,750.
Additional Conditions
- Battery Capacity: The vehicle’s battery must have a capacity of at least seven kilowatt-hours (kWh).
- Income Eligibility: There are modified adjusted gross income (modified AGI) thresholds for eligibility, ensuring that not all individuals qualify.
Meeting both requirements fully qualifies a vehicle for the $7,500 tax credit. If only one requirement is met, the credit is reduced to $3,750.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-battery-requirements-for-the-7500-tax-credit/
