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Exiting in style: President Biden leaves remarks to do laps in electric vehicle
President Biden wrapped his press conference on electric vehicles and hopped in an electric Jeep Rubicon, doing laps around the South Lawn of the White House.
WASHINGTON - The U.S. government is loosening some rules governing electric vehicle tax credits, potentially making more EVs eligible for credits.
On Friday, the Treasury Department announced final regulations for the credits under the 2022 Inflation Reduction Act, giving automakers more time to comply with some provisions about where battery minerals can come from.
The credits range from $3,750 to $7,500 for new EVs. There's also a $4,000 credit for used ones.
The announcement comes amid the Biden administration’s goal that half of all new vehicle sales be electric by 2030.
RELATED: Number of electric vehicles that qualify for new electric vehicle tax credit drops to 13
In January, the IRS announced updates to its $7,500 tax credit for electric vehicle owners, which reduced the number of electric and hybrid vehicles that qualified for the tax credit to 13 – down from about two dozen in previous years.
How to qualify for EV tax credits
Qualifying for the credits depends on a person's income, the price of the vehicles and requirements related to battery makeup and minerals that get tougher each year.
To get the credits, EVs also must be assembled in North America. Some plug-in hybrids also can qualify.
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Ford unveils its first all-electric SUV
The Mustang Mach E will go 230 miles to more 300 miles per charge depending on how it’s equipped.
Starting this year, complex rules are being phased in to promote development of a domestic electric vehicle supply chain. The rules would limit EV buyers from claiming the full tax credit if they purchase cars containing battery materials from China and other nations "of concern" that are considered hostile to the United States. Those include Russia, North Korea and Iran.
Under the final rule, however, small amounts of graphite and other minerals used in batteries would be exempt from the restriction until 2027, because their country of origin is nearly impossible to trace, officials said.
Insurance rates are often higher for electric vehicles
While a $4,000 to $7,500 tax credit is a hefty reward for simply owning an electric vehicle, there are insurance implications.
File: Person charges an electric vehicle. (Credit: Ezequiel BECERRA /AFP via Getty Images)
Electric vehicles are costlier cars, both in terms of initial purchase price and insurance rates. Repairs for electric vehicles are costly because parts are more difficult to find, often leading to higher premiums, according to Kelley Blue Book.
Repairs are all around difficult when it comes to electric vehicles. Certain safety precautions must be taken if the batteries are damaged, raising the repair bill. The more insurance companies must pay out for repairs, the higher a driver's potential rate.
This story was reported from Los Angeles. The Associated Press contributed.