The landscape of electric vehicle (EV) tax credits in the United States underwent significant changes with the introduction of the Inflation Reduction Act of 2022. A key provision of this act is the Clean Vehicle Credit, which has specific requirements for vehicle eligibility, including a crucial “final assembly in North America” stipulation. This requirement, effective from August 17, 2022, means that for many EVs to qualify for the tax credit, they must be assembled in North America. Understanding if a vehicle meets this criteria is essential for both buyers and dealers. A VIN lookup is a critical tool in this process, allowing you to verify the assembly location and other key details of a vehicle.
This article will delve into the North American final assembly requirement for the Clean Vehicle Credit. We’ll explore how to use a VIN lookup to check vehicle assembly location, understand the timelines and changes introduced by the Inflation Reduction Act, and provide clarity on how these regulations impact EV buyers seeking to benefit from the Clean Vehicle Credit.
Understanding the Clean Vehicle Credit and North American Assembly
The Clean Vehicle Credit, formerly known as the Qualified Plug-in Electric Drive Motor Vehicle Credit, is a federal tax incentive designed to encourage the adoption of clean vehicles, including electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell electric vehicles (FCEVs). The Inflation Reduction Act (IRA) of 2022, through amendments to IRC 30D, introduced stricter requirements for this credit, aiming to bolster North American manufacturing.
One of the most impactful changes is the mandate for final assembly in North America. This rule dictates that to be eligible for the Clean Vehicle Credit, new EVs must undergo their final assembly in the United States, Canada, or Mexico. This requirement took effect on August 17, 2022, and applies to vehicles purchased and placed in service after August 16, 2022.
For vehicles placed in service on or after January 1, 2023, the Clean Vehicle Credit is further governed by updated guidance from the Internal Revenue Service (IRS) and the U.S. Department of the Treasury. It’s crucial to stay informed about these evolving regulations to ensure eligibility for the credit. The IRS provides comprehensive details on the Clean Vehicle Credit and eligibility criteria on their website, IRS.gov.
Vehicles Placed in Service After December 31, 2022: Point-of-Sale Credit and VIN Verification
For those purchasing EVs in 2023 and beyond, there are important updates to the Clean Vehicle Credit process. Starting January 1, 2024, a significant change allows buyers to transfer the Clean Vehicle Credit to the dealership at the point of sale. This means that instead of waiting to claim the credit when filing taxes, eligible buyers can reduce the upfront purchase price of the EV by the credit amount immediately.
This point-of-sale credit transfer streamlines the process for consumers. However, it also places new responsibilities on dealerships. Dealers must register with the IRS through the IRS Energy Credits Online portal and submit vehicle information to the IRS to confirm eligibility and credit amount before the sale. This submission is essential; without it, buyers cannot claim the tax credit, nor can they transfer it to the dealer. Upon successful submission, the dealer must provide the buyer with a copy of the IRS approval.
VIN verification becomes paramount in this new system. Dealers need to accurately determine a vehicle’s final assembly location to ensure compliance with the North American assembly requirement. Similarly, buyers can use a VIN lookup to independently verify this information and confirm the dealer’s assessment. The NHTSA VIN decoder is a valuable resource for this purpose.
Vehicles Purchased Between August 17 and December 31, 2022: Model Year Considerations
The period between August 17 and December 31, 2022, had its own set of rules regarding the North American assembly requirement. The list provided below was relevant specifically to vehicles purchased and delivered within this timeframe. It was based on Model Year 2022 and Model Year 2023 vehicles, using data submitted by manufacturers to the EPA and NHTSA as of December 31, 2022.
It’s important to note that for vehicles purchased on or after January 1, 2023, this list is no longer the primary method for verification. Instead, VIN lookup is the recommended approach to confirm final assembly location.
Furthermore, some manufacturers had reached the previous cap of 200,000 EV credits for vehicles acquired before January 1, 2023. If a manufacturer had reached this cap, vehicles might not have qualified for the full tax credit during this period. This sales cap does not apply to vehicles acquired after December 31, 2022.
Here was the list of Electric Vehicles Assembled in North America for purchases between August 17 and December 31, 2022:
Note: Further conditions for eligibility may apply depending on the purchase date.
| Model Year | Vehicle | Manufacturer Sales Cap (applies to vehicles placed in service before January 1, 2023) |
|---|---|---|
| 2022 | Audi Q5 | |
| 2022 | BMW 330e | |
| 2022 | BMW X5 xDrive45e (PHEV) | |
| 2022 | Chevrolet Bolt EUV | Manufacturer sales cap met |
| 2022 | Chevrolet Bolt EV | Manufacturer sales cap met |
| 2022 | Chrysler Pacifica PHEV | |
| 2022 | Ford E-Transit | |
| 2022 | Ford Escape PHEV | |
| 2022 | Ford F-150 Lightning | |
| 2022 | Ford Mustang MACH E | |
| 2022 | GMC Hummer EV Pickup | Manufacturer sales cap met |
| 2022 | GMC Hummer EV SUV | Manufacturer sales cap met |
| 2022 | Jeep Grand Cherokee 4xe | |
| 2022 | Jeep Wrangler 4xe | |
| 2022 | Lincoln Aviator PHEV | |
| 2022 | Lincoln Corsair PHEV | |
| 2022 | Lucid Air | |
| 2022 | Nissan Leaf | |
| 2022 | Rivian EDV | |
| 2022 | Rivian R1S | |
| 2022 | Rivian R1T | |
| 2022 | Tesla Model 3 | Manufacturer sales cap met |
| 2022 | Tesla Model S | Manufacturer sales cap met |
| 2022 | Tesla Model X | Manufacturer sales cap met |
| 2022 | Tesla Model Y | Manufacturer sales cap met |
| 2022 | Volvo S60 Recharge | |
| 2023 | BMW 330e | |
| 2023 | BMW X5 xDrive45e (PHEV) | |
| 2023 | Cadillac Lyriq | Manufacturer sales cap met |
| 2023 | Chevrolet Bolt EV | Manufacturer sales cap met |
| 2023 | Ford E-Transit | |
| 2023 | Jeep Grand Cherokee 4xe | |
| 2023 | Jeep Wrangler 4xe | |
| 2023 | Lincoln Aviator PHEV | |
| 2023 | Lucid Air | |
| 2023 | Mercedes EQS SUV | |
| 2023 | Nissan Leaf | |
| 2023 | Rivian R1S | |
| 2023 | Rivian R1T | |
| 2023 | Tesla Model 3 | Manufacturer sales cap met |
| 2023 | Tesla Model S | Manufacturer sales cap met |
| 2023 | Tesla Model X | Manufacturer sales cap met |
| 2023 | Tesla Model Y | Manufacturer sales cap met |
| 2023 | Volkswagen ID.4 |
This list is subject to updates as manufacturers provide new vehicle information. For the most current data, always refer to official resources and use a VIN lookup tool.
Vehicles Purchased Before August 17, 2022: No North American Assembly Requirement
For EVs purchased before August 17, 2022, the North American final assembly requirement did not apply. Vehicles purchased before this date may still be eligible for the Clean Vehicle Credit under the previous rules, even if they were assembled outside of North America. For details on these older rules, consult the IRS Qualified Plug-in Electric Drive Motor Vehicle Credit information and Electric Vehicle (EV) and Fuel Cell Electric Vehicle (FCEV) Tax Credit page.
Utilizing a VIN Decoder for Assembly Location Verification
The Vehicle Identification Number (VIN) is a unique identifier for each vehicle. A VIN decoder is a tool that uses this number to provide detailed information about the vehicle, including its assembly location. The NHTSA VIN decoder, provided by the U.S. Department of Transportation, is a reliable resource to identify the build plant and country of manufacture.
To use a VIN lookup for assembly location, simply enter the VIN into the decoder. The results will indicate where the vehicle was manufactured. This is a crucial step in verifying North American final assembly for Clean Vehicle Credit eligibility.
It’s important to remember that verifying North American final assembly via VIN lookup is only the first step in determining Clean Vehicle Credit eligibility. Other factors, such as battery component and critical mineral sourcing (effective in 2023), and income limitations (effective in 2024), also play a significant role. Always consult the latest IRS guidelines (IRS Credits for New Electric Vehicles Purchased in 2023 and After) and IRS.gov/cleanvehicles for complete eligibility requirements.
A VIN plate, crucial for VIN lookup to verify vehicle details and assembly location for Clean Vehicle Credit eligibility.
While VIN lookup provides valuable information, it’s worth noting that for some manufacturers, assembly locations can vary based on specific vehicle trims, model year production dates, or other factors. Some models may be produced in multiple locations. Therefore, always use the VIN decoder or check the information label on the vehicle itself for the most accurate assembly location for a specific vehicle. For any questions about VINs or qualifying information, consumers should contact the vehicle manufacturer directly.
North America Defined for Final Assembly: For the Clean Vehicle Credit, “North America” is defined as the United States, Puerto Rico, Canada, and Mexico. Final assembly within any of these locations meets the North American assembly requirement.
Disclaimer: The information provided here is for informational purposes only and should not be considered official or legally binding. For complete details and the most up-to-date information on Clean Vehicle Credit eligibility, always refer to IRS.gov/cleanvehicles. Use a VIN lookup as a key tool in your research, but ensure you understand all eligibility criteria to determine if an EV qualifies for the Clean Vehicle Credit.
