President Biden announces $7,500 electric vehicle tax credits, Ford and GM hike prices by up to $8,500

The Biden administration announced on Tuesday that 20 electric vehicle models will remain eligible for tax credits of up to $7,500 through the end of 2022 under legislation signed by President Joe Biden.

The law, which was signed on Tuesday will cease credits for about 70% of the 72 models that were previously eligible, per the Alliance for Automotive Innovation, an industry trade group. For electric vehicles to qualify for the grant, they must have been manufactured in the United States.

Biden said that his legislation is necessary to fight “the existential crisis of climate change.”

“It addresses the climate crisis and strengthens our energy security, creating jobs manufacturing solar panels, wind turbines, and electric vehicles in America with American workers,” he said. “It lowers families’ energy costs by hundreds of dollars each year.”

Business Enquirer reported that vehicles currently eligible are 2022 model year EV or plug-in hybrid electric versions of the Audi Q5; BMW X5 and 3-Series Plug-in; Ford Mach-E, F Series, Escape PHEV and Transit Van; Chrysler Pacifica PHEV, Jeep Grand Cherokee PHEV and Wrangler PHEV; Lincoln Aviator PHEV and Corsair Plug-in; Lucid Air; Nissan Leaf; Volvo S60; and Rivian EDV, R1S and R1T. The 2023 Nissan Leaf, BMW 3-Series and Mercedes EQS are also eligible.

Buyers of vehicles which are no longer eligible will still qualify provided that they can provide written contracts before the legislation was signed. Some manufacturers had been pressing customers to make portions of deposits non-refundable to qualify.

The IRS said “if a customer has made a non-refundable deposit or down payment of 5% of the total contract price, it is an indication of a binding contract.”

Car manufacturers, including Ford and GM, have since released statements confirming that they will be raising the prices of their cars by approximately the same amount, blaming the price hikes on “significant material cost increases and other factors.”

Ford told customers in their announcement to expect increases starting from $6,000 and up-to $8,500 for its electric vehicles. The F-150 Lightning Pro is expected to sell for $46,974, which is a $7,000 increase from the $39,947 charged for last year’s model. GM stated that the price of their Hummer increased by $6,250 last month.