Despite early indications to the contrary, the Volkswagen ID.4 and certain Rivian models will qualify for tax credits under the Inflation Reduction Act, the automakers confirmed this week.
Volkswagen said that all variants of the ID.4 that are made at its Chattanooga, Tennessee, plant will qualify for federal tax incentives in 2023. Earlier this week, the IRS listed the vehicle as not qualifying for incentives.
With that, VW becomes the first foreign automaker whose all-electric vehicles qualify for U.S. tax credits. The company has worked hard to localize EV production, starting assembly of vehicles at its American factory, and announcing a battery plant that it will build in Canada later in the decade.
Read: IRS Changes EV Tax Credit Vehicle Classifications – Here’s The New List Of Qualifying Cars
“The ID.4 is already one of the lowest-priced electric SUVs on the market, and the $7,500 Federal Tax Credit makes it even more attainable,” said Pablo Di Si, president and CEO of the VW Group North America. “This shows that we made the right decision to localize production of the ID.4 in Tennessee and invest even further in battery production, components and innovation.”
Under the Inflation Reduction Act, electric vehicles can qualify for up to $7,500 in tax credits provided that the minerals that go into their batteries are sourced from countries that friendly to America, and that the majority of their battery components come from North America. If they satisfy just one of those requirements, then their buyers can apply for up to $3,750 in tax credits.
Such is the case for Rivian‘s passenger vehicles, the R1S and the R1T, which were previously listed as not qualifying. However, the automaker said that configurations of its vehicles that cost less than $80,000 (the upper limit for any vehicle to qualify for incentives) will now qualify for $3,750 in tax incentives.
The American startup said that it had “submitted updated documentation to the IRS stating that its 2023 R1T and R1S models qualify for the critical minerals sourcing criteria” in a statement to Autonews.
