Electric Vehicles Are IN

October 1st, 2022 by

If you’ve been considering an alternative, hybrid, or electric vehicle, now is the perfect time. Facing rising gas prices and rising inflation, purchasing an alternative fuel vehicle, especially an electric vehicle, can help you save time and money. However, that’s only the beginning. The monumental Inflation Reduction Act of 2022 made electric vehicles even more attractive by offering up to a $7,500 tax credit on the purchase of a qualifying new electric vehicle (EV).

At Greenway Hyundai Orlando, we offer one of the largest and most diverse selections of EVs in the area, including:

  • Hyundai Ioniq 5
  • Hyundai Kona Electric

If you have questions about the new Inflation Reduction Act and which vehicles qualify, don’t hesitate to reach out to the team at Greenway Hyundai of Orlando. In the meantime, let’s take a closer look at the Inflation Reduction Act and what you need to know to claim your tax credit.

General Guidelines for Claiming the New Tax Credit

The Inflation Reduction Act of 2022 is designed to drive the adoption of electric vehicles in the U.S. Simply put, the new Inflation Reduction Act includes a $7,500 tax credit at the time of purchase for new qualifying EVs. The new tax credit also offers up to $4,000 for used EVs. The new legislation tax credit replaces the previous incentive system that only offered a $7,500 tax credit for new EVs.  Here are a few key points about the federal tax credit. :

  • It will remain at $7,500 for eligible EVs.
  • The timeline to qualify is from January 2023 to December 2032.
  • The electric vehicle must be assembled in North America.
  • Most of the battery components must come from and be sourced from North America.
  • A certain percentage of vital minerals must be sourced via countries with U.S. free trade agreements or in North America.
  • There is a new federal tax credit of $4,000 for pre-owned and used EVs that are priced below $25,000.
  • The new credit will also apply to Plug-in Hybrid EVs (PHEVs) as long as the vehicle meets all of the other requirements.

How Does the Federal Tax Credit Work?

A tax credit can be a very powerful and dynamic way to directly reduce the amount of taxes you owe. While tax deductions are taken off of your taxable income earned, tax credits are taken directly off of your tax bill. For example, if you purchased an eligible EV and owed $8,000 in federal income tax, you would receive the full tax credit of $7,500 to reduce your tax bill to $500. It’s important to understand that any unused part of the $7,500 tax credit will not be offered as a credit for next year’s taxes or as a refund. However, based on the terms of the new deal, you may be eligible to use the credit upfront when you purchase your EV.

What If I Bought My Electric Vehicle Before 2023?

If you purchased a qualifying vehicle prior to President Biden signing the act into law on August 16, all of the previous rules apply. Currently, we are in a liminal period where some of the new tax credit rules are in effect. Yet, most of the new rules do not do into effect until the new year.

Clarifying the New Electric Vehicle Tax Credits

The new rules are designed to help increase EV purchases and manufacturing in the United States. At the same time, it’s going to significantly limit your choices until auto manufacturers can move the production of vehicles to the United States, which is paramount to adhere to the new battery rules. Under the previous legislation, there were a total of 27 new 2022 vehicles that qualified for the tax credit. For 2023 cars, there are currently five options.

Contact Greenway Hyundai of Orlando for Electric Vehicles and Plug-in Hybrid Electric Vehicles

We get it — understanding and navigating complex legislation around electric vehicles and PHEVs can be challenging. Fortunately, the seasoned experts at Greenway Hyundai of Orlando can help. At Greenway Hyundai of Orlando, we offer one of the largest and most diverse inventories of premium new vehicles, including:

  • Hyundai Compacts
  • Hyundai Sedans
  • Hyundai Crossovers/SUVs

Not in the market for a new Hyundai? We are also home to an expansive array of premium Certified Pre-Owned Hyundais as well as used vehicles from all the top manufacturers. In either case, our experienced sales professionals will guide you through the process, explain all of your options, and help you make the best decision. Contact Greenway Hyundai of Orlando today!

Posted in Uncategorized