If you buy a Ford Mustang Mach-E before Jan. 1, you might qualify for a federal tax credit of up to $3,750. If you buy it after, you probably won’t.
The Mach-E, Reuters reports, “is unlikely” to qualify for the discount under new rules that kick in when the calendar shifts to next year.
It’s not alone. Tesla says its Model 3 sedan also loses $3,750 worth of tax rebates. Many electric vehicles (EVs) could lose access to $3,750 or $7,500 worth of discounts as the new year rolls in.
The law that created the credits imposes a series of requirements meant to promote domestic production and force the auto industry to build supply lines outside of China for critical battery minerals.
Related: How Do Federal EV Tax Credits Work?
Those requirements ladder up each year. They will increase in January, and many automakers appear unready.
We’ve contacted every automaker with an EV that qualifies for the discount today. Only one has been able to confirm that a vehicle will still qualify in three weeks. Chrysler Pacifica plug-in hybrid shoppers can rest easy.
Everyone else faces a time crunch. If you buy an eligible EV on or before Dec. 31, you’ll get the discount (assuming you meet certain income caps). If you buy a day later, you may not.
Should You Rush Your Car Shopping Plans?
All the same, we’re not advising anyone to hurry a massive financial decision. Automakers can qualify for the credits at any time, so some may earn them back later in 2024 as they ink deals with new suppliers. The industry is struggling to catch up to the new requirements. But a $7,500 price change could be a competitive advantage that sells tens of thousands of cars, so they’re very motivated to get there.
In fact, Reuters says that Ford is “still reviewing” whether the F-150 Lightning will qualify after Jan. 1. The company surely knows where the minerals used in the truck’s battery come from, so that likely means the company is trying to ensure it acquires enough domestically sourced minerals to keep the truck on the list as quickly as possible.
With that in mind, our advice remains: If you’re sure of the car you want and ready to buy, move before January to get the discount. But only then. If you’re not in the immediate market, it’s safe to wait a few months while automakers sort out new suppliers and try to get the credits back.
When that happens, shoppers’ situation will improve dramatically. Another change to the law lets Americans use the rebate as a down payment next year rather than waiting to claim it on their taxes.
We’ll keep you posted on which cars qualify as the list evolves.
