Good EV tax credit news for used Teslas, EV lobbying by Vietnamese automaker

9 months ago 180

If the owner of this Tesla I was behind a few years ago sells it, it could get the buyer a $4,000 used EV tax credit. (Photo by Kay Bell)

This week brought a tale of two tax credits that were expanded as part of the Inflation Reduction Act for electric vehicles, usually referred to as EVs.

Tesla fans got some good news. It appears that the electric automaker's used vehicle now qualifies for the $4,000 electric vehicle (EV) tax credit.

Meanwhile, the Vietnamese EV manufacturer VinFast is working to get its autos on the list of new EVs that qualify for the $7,000 tax credit.

Tesla missing documents: Starting this year, if you buy a qualified used EV or fuel cell vehicle (FCV) from a licensed dealer for $25,000 or less, you may be eligible for the Inflation Reduction Act tax break.

The EV or FCV used clean vehicle tax credit is 30 percent of the sale price, up to a maximum credit of $4,000.

The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.

Last month, CleanTechnica reported that Tesla officials apparently forgot to file the paperwork with the Internal Revenue Service so that its used EVs could qualify for the $4,000 used EV tax credit.

Now it appears that the IRS got the necessary data.

IRS adds Tesla to one list: The IRS web page on the Used Clean Vehicle Tax Credit, which was updated on Aug. 3, directs readers to the Department of Energy's (DoE) fuel economy site for details on qualifying EVs.

Five Teslas — Models 3, S, X, Y, and Roadster — are listed on the DoE page, as shown in the screen shot below.

However, for those who would like to see it on IRS.gov itself, its Manufacturers and Models of Qualified Used Clean Vehicles page doesn't list any credit-eligible used Teslas.

But note, too, that this page, per its tagline, was last reviewed or updated on July 13. The Aug. 3 referral to the DoE info should supersede it. The IRS has a lot of other items on its to-do list, so it's not surprising that maintenance of IRS.gov might lag.

Vietnamese-U.S. EV collaboration: Dedicated gearheads (like the hubby) probably are more familiar than I with the Southeast Asian EV VinFast.

They also likely are aware that VinFast broke ground last week on an 1,800-acre EV vehicle factory in North Carolina. The plant is expected to start operating in 2025, and is designed to initially produce up to 150,000 vehicles a year.

VinFast's VF 8 electric SUV was added earlier this year to the list of vehicles eligible for a $7,500 rebate in California under that state's Clean Vehicle Rebate Project (CVRP).

Now, with the Raliegh-area facility underway, VinFast officials and the U.S. lobbying group U.S.-ASEAN Business Council say that the company's autos should qualify for the federal $7,500 new EV tax credit.

Looking for return on foreign commitment: One of the White House's climate goals is the building more alternative fuel vehicles in the United States. VinFast says that by doing that, it and its customers should be rewarded.

"They will want to be part of the EV supply chain and they won't want to be discriminated against in favor of other EV producers," Ted Osius told Reuters in a recent interview. Osius is a former U.S. ambassador to Vietnam who now is head of the U.S.-ASEAN Business Council.

Once the U.S. operation starts rolling VinFast EVs onto the streets, they could qualify for the $7,500 new EV tax credit. VinFast vehicles do not currently qualify because they are built in Vietnam.

Some foreign-built EVs are eligible for the federal tax credit because they have free trade agreements with the United States. Vietnam does not.

Other international allowances: VinFast is seeking to jumpstart that tax break eligibility by having the credit extended now to vehicles built in Vietnam since the company has shown a commitment to producing autos here.

It's basing its argument on recent deals the United States made with other foreign EV makers.

The United States and Japan signed a trade deal in March that gives Japanese car manufacturers more access to the $7,500 EV tax credit. The European Union and the United Kingdom are seeking similar concessions.

We'll see which moves more quickly, Washington, D.C., lobbyists or the crews literally building VinFast's North Carolina plant.

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