The amount of the new clean vehicle credit is up to $7,500 per vehicle. This credit is divided into two parts:
Thus, a vehicle that meets both requirements can qualify for the full $7,500 credit. If it meets only one of the requirements, the credit will be $3,750.
The critical minerals requirement involves a certain percentage of the value of the applicable critical minerals in the vehicle's battery being extracted or processed in the United States or a country with which the United States has a free trade agreement, or recycled in North America. The battery components requirement involves a certain percentage of the value of the components in the vehicle's battery being manufactured or assembled in North America.
The applicable percentages for these requirements vary based on the calendar year the vehicle is placed in service, starting at 40% for critical minerals and 50% for battery components in 2024, and increasing in subsequent years.
Additionally, the credit is subject to income and price limitations. The manufacturer's suggested retail price (MSRP) for the vehicle must not exceed $80,000 for vans, sport utility vehicles, and pickup trucks, and $55,000 for other vehicles. The taxpayer's modified adjusted gross income must not exceed $300,000 for joint filers, $225,000 for heads of household, and $150,000 for other filers.
Sources:
§ 30D. Clean vehicle credit
Notice 2022-46
Instructions for Form 8936 (2023)
Rev. Proc. 2023-38
Rev. Proc. 2023-33
FS-2023-4
