As President Joe Biden signed the Democrats’ “Inflation Reduction Act,” which pledges up to $7500 in tax credit for new electric vehicle buyers, Ford raised the price of its electric vehicles by up to $8500, according to reports.
Despite the act’s promises, even top Democrats who are touting the bill can’t explain how it will actually help lower inflation.
Nevertheless, if you buy an electric vehicle averaging $62,893, you may be eligible for a tax credit of up to $7,500 until the year 2032.
$62,893 is the average price of vehicles sold only through dealerships and does not account for direct-to-consumer sales of more expensive electric vehicles.
This number also accounts for all-electric vehicle transactions, both new and used.
According to CNBC:
Under the Inflation Reduction Act — which received Senate approval on Sunday and is expected to clear the House this week — a tax credit worth up to $7,500 for buyers of new all-electric cars and hybrid plug-ins would be extended through 2032.
The bill would also create a separate tax credit worth a maximum $4,000 for used versions of these vehicles.
“First, in order to qualify, there are price and income restrictions,” said Seth Goldstein, a senior equity analyst at Morningstar.
For new vehicles, the manufacturer’s suggested retail price for sedans would need to be below $55,000 to be eligible for the tax credit.
For SUVs, trucks and vans, that price cap would be $80,000.
Additionally, the credit would be unavailable to single tax filers with modified adjusted gross income above $150,000.
For married couples filing jointly, that income limit would be $300,000, and for individuals who file as head of household, $225,000
Despite the apparent savings, the tax credit only applies to electric vehicles, with an average price of $62,893.
The average price of all vehicles, including those powered by traditional internal combustion engines, is $47,198.
At the same time Biden signed the bill with the promised savings for electric vehicles, Ford also announced a price increase of up to $8,500 for their EVs.
Biden's inflation bill: $7,500 electric vehicle tax credit.
Ford: Raised price of electric vehicles by $8,500.
Way to go, Joe.
— Daniel Turner (@DanielTurnerPTF) August 16, 2022
In a statement to Fox Business, Ford claims the price hike is “completely unrelated” to the Democrats’ inflation bill.