If you’re considering purchasing an electric vehicle (EV) in 2023, it’s essential to understand the revised rules governing the available credits. Familiarizing yourself with these changes can help you optimize the credit you qualify for. Generally aimed at middle-income taxpayers, the credit is designed for eligible moderately priced EVs. In this blog post, we will explore the new rules surrounding EV credits and provide valuable information to assist you in maximizing the credit you’re entitled to.

Qualifying for the Electric Vehicle Credit

Starting in 2023, one of the key requirements to qualify for the EV credit is that the final assembly of the vehicle must take place in North America. To determine if a specific vehicle meets this criterion, you can enter its Vehicle Identification Number (VIN) into VIN decoders provided by reputable sources such as the Alternative Fuels Data Center (AFDC) or the National Highway Traffic Safety Administration (NHTSA). These VIN decoders will verify if the vehicle fulfills the North American assembly requirement. You can also refer to the list of eligible makes and models available at FuelEconomy.gov.

Calculation of the Credit

The new rules base the credit amount on two distinct requirements, both dependent on the sourcing of the vehicle’s battery components:

  1. Critical Minerals Requirement: Meeting this requirement involves sourcing a minimum percentage of the battery’s minerals from the United States or a country with an effective free trade agreement with the United States. Compliance with this requirement qualifies taxpayers for a $3,750 credit.
  2. Battery Component Requirement: Satisfying this requirement necessitates manufacturing or assembling a minimum percentage of the battery’s components in North America. Complying with this requirement also provides taxpayers with a $3,750 credit.

A vehicle can meet either one or both of these requirements, resulting in a $3,750 credit or a $7,500 credit, respectively.

The new rules are specifically designed to incentivize EV manufacturers to relocate their battery supply chains from China to North America or countries with more favorable relations with the United States. By encouraging this shift, the aim is to enhance domestic production and decrease reliance on foreign sources for critical EV components.

Qualified Fuel Cell Motor Vehicles

The credit is also applicable to new qualified fuel cell motor vehicles. These vehicles use one or more cells to convert chemical energy directly into electricity through the combination of oxygen and hydrogen fuel. To be eligible, they must meet the North American final assembly requirement and can qualify for either a $3,750 or $7,500 credit, depending on their compliance with the critical minerals and battery components requirements.

Income and MSRP Limitations

It’s crucial to be aware that your ability to claim the EV credit is subject to a modified adjusted gross income (MAGI) limitation. MAGI includes adjustments to your income received from U.S. territories. The following thresholds apply:

  • Married taxpayers filing jointly or surviving spouses: MAGI should not exceed $300,000.
  • Taxpayers filing as head of household: MAGI should not exceed $225,000.
  • Other taxpayers (single, married filing separately): MAGI should not exceed $150,000.

Additionally, vehicles with a Manufacturer’s Suggested Retail Price (MSRP) exceeding $80,000 for vans, pickup trucks, and sport utility vehicles (SUVs), or $55,000 for other vehicles, are not eligible for the credit.


Understanding the new rules surrounding EV credits is crucial for maximizing the benefits when purchasing an electric vehicle in 2023. By ensuring the final assembly occurs in North America, meeting critical minerals and battery component requirements, and adhering to income and MSRP limitations, you can make the most of the available credits. If you have any questions or need further assistance regarding your EV purchase, feel free to contact us. Embrace the future of sustainable transportation while optimizing the incentives designed to support it.