Ford Authority

Ford EV Tax Credit MSRP Requirements Make Little Sense

As Ford Authority reported yesterday, the Ford Escape PHEV will remain eligible for the revised EV tax credit put into law by the Inflation Reduction Act of 2022, at least until proposed guidance on the critical mineral and battery component requirements of that bill arrive, which is expected to happen in March 2023. However, there are some strange stipulations regarding the MSRP requirements for eligible vehicles that don’t make much sense.

Clean Vehicle Tax Credit MSRP Requirements
Model Year Vehicle Applicable MSRP Limit
2022, 2023 Ford Escape Plug-In Hybrid $80,000
2022, 2023 Ford E-Transit $80,000
2022, 2023 Ford F-150 Lightning $80,000
2022, 2023 Ford Mustang Mach-E $55,000
2022, 2023 Lincoln Aviator Grand Touring $80,000
2022, 2023 Lincoln Corsair Grand Touring $55,000

The new clean vehicle EV tax credit only applies to vehicles that have undergone final assembly in North America, but there are also MSRP limits of $80,000 for vans, sport utility vehicles, and pickup trucks, as well as $55,000 for other vehicles. The Ford Escape PHEV, for example, carries an MSRP cap of $80,000, as it should, but that isn’t the case for all models that qualify for this credit.

On the Blue Oval side of things, the Ford E-Transit and Ford F-150 Lightning are capped at $80k, which makes sense given the fact that one is a van and one is a pickup The same is true of the Lincoln Aviator Grand Touring, which caps out at $80,000.

However, things get a bit strange from there. The Lincoln Corsair Grand Touring – which is the more luxurious twin of the Ford Escape PHEV – has an MSRP limit of just $55,000, which means that the government classifies it with “other vehicles,” even though it should slot in with the sport utility vehicle segment. The same rings true of the Ford Mustang Mach-E, which also features an MSRP limit of $55,000, even though it’s technically a crossover, like the Escape.

Ford isn’t the only anomaly on this list, either. In fact, the Tesla Model Y seven-seat variants feature an $80k cap, while five-seat models only get $55k, oddly enough. The Volkswagen ID.4 gets a $55k cap for the base, Pro, Pro S, and S trims, while the AWD Pro and Pro S qualify for the higher MSRP. Otherwise, all qualifying vehicles seem to be classified correctly, but these deviations are undoubtedly strange.

We’ll have more on the new clean vehicle tax credit soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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  1. Michael J Genzale

    I am all for limiting tax credits that favor made in America stipulations. So many other countries have benefits for their domestic manufactures, why not us.
    However our rule makers in government make things a little crazy at times. As a Ford salesmen, retired, at a dealership on eastern Long Island NY I was frustrated by a DOT standard that allowed Toyota Prius to use the HOV lanes but disallowed Ford hybrids. A ridiculous arbitrary guideline.

    1. Pat Shozo

      California we use the HOV lanes as a single occupant if we drive a BEV, PHEV, FC, or NG vehicle. $22 for the stickers and good for 4 years. I drive a BEV Ford Lightning and my wife drives a PHEV Honda Clarity – both with HOV exempt stickers. My wife’s new BEV incoming (Mustang Mach E) will also get the sticker. No complaints here.

  2. Sean Rooney

    Starting to think the whole EV credit was smoke and mirrors. They passed a law that very few vehicles will actually qualify for. It made Congress and Biden look like heroes for green energy laws but actually does little to nothing to encourage EV usage or sales.

    I was a Lightning reservation holder. Virtually none of the trim levels other than Pro will qualify, especially if you add an options.

    For the Lightning Lariat trim I wanted with a few options it pushed the truck to almost 90k MSRP. I then tried to option the XLT and it’s also over the cap. It didn’t help that Ford raised the price twice after the law was passed.

    I would imagine once you choose higher trims or options it’ll be the same for any manufacturer.

    Many Lightning buyers will cancel (me included). I’ve seen quite a few opting for an F150 hybrid which has a 700 mile range. I decided to go with an Explorer ST, which was my original plan when the Lightning debuted. I delayed my purchase 1.5 years while waiting!

    At this point I doubt I’ll ever own an EV unless solid state batteries are the norm, or they’re running on Flux capacitors. The range isn’t there yet. Charging stops aren’t efficient and take too long. Then the loss of range in the cold is pretty steep.

    1. Pat Shozo

      Very clear and works for us:
      2022 Lightning Lariat was $69K and I did not need options so how does that work for tax credit ?
      I get $7500 in February 2023 thanks to the “old tax law”.
      My wife has a 2023 Mustang Mach E Premium base (standard battery, RWD) being delivered next month and it qualifies for the full $7500 tax credit because it’s $25 under the max $55K.
      We both got the credits so what is everyone’s problem ?

    2. Scott Brown

      Buyers should be prepared for a certain percentage of their vehicles to experience range shrinkage as the mileage goes up. They should also expect less range in cold weather. I am sure that many people will have no issues with range or charge time requirements. But, I think that most people will understand that these vehicles have unconventional operating parameters.
      I had to laugh when I saw that the EV subsidies were rolled into the “Inflation reduction act”. Not using taxpayer money to artificially reduce the cost of a consumer product is a real “inflation reducer”.

  3. John W.

    The fact that they had to use our hard earned money to float EVs tells the whole story, that they’re failing. How about they give tax credits for people who own Heavy Duty trucks and diesels?? Glad that this new Congress will be cutting life support for EVs.

    1. RWFA

      Now K-street John tossing in a bit of failure FUD while helping pushing Big Oil’s scripted rhetorical ball a little further down field by suggesting another Big Oil subsidy via truck credits.

      1. B PEARMAN

        If you own a large truck for your business you get a tax write off. That’s my hard earned tax money supporting a vehicle that chokes the life out of the world!

      2. roflmao

        As spoken by an EV fanboi

  4. Dr David

    It is ironic that on today’s Ford Authority update this article seems to imply that not enough of Ford’s vehicles meet the tax credit limits while on another article in this post people are trashing Elon Musk for his company benefiting from tax credits. Tax credits OK for Ford, not OK for Musk? Might this be because the comments on anti-tax credits for Musk are in response to an article about Musk saying Ford won’t survive the next recession? If so, shame on the commenters!

    Another article in this post states the all EV date for Ford Explorers is now 2035, not 2030.

    Not all is well in EV land even with the tax credits.

    1. RWFA

      I missed the article where Musk was being bashed. Can you point us to it?

      Musk is become a dangerous jacka$$ but that doesn’t mean Tesla shouldn’t benefit from credits if it meets the requirements.

  5. Joe

    Hope this ends the long line of flippers on some of these EVs.

  6. RWFA

    Did folks miss the concept of the credit restrictions are forward looking and designed to incentivize OEMs to pull battery and EV manufacture investment, and jobs, back into the US and NAFTA area??

  7. Jon

    If you really look into it all the politicians and their cronies are heavily invested in ev ‘s that is the problem there greed is behind it there is no global warming anyone can pay for a study that is for or against it the problem is not global warming but too many people in the world kinda like ants at the picnic


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