Ford Authority

New Ford EV, PHEV IRA Tax Credit Eligibility Revealed

Since the Inflation Reduction Act of 2022 was revealed last year, there has been much confusion and debate over the bill’s newly proposed EV tax credits, prompting Ford to partner with professional services firm Ernst & Young LLP to help customers navigate the intricacies of these new incentives. In terms of Ford EVs and PHEVs, most commercial customers previously seemed set to qualify for the tax credits, while lessees won’t see any of that money and the rest seemed to have been settled following a few changes in February. Now, the U.S. Treasury has released its updated guidance on IRA tax credit eligibility, giving shoppers some clarity on what they can expect in terms of those incentives.

Current Ford IRA Tax Credit Figure
Ford F-150 Lightning $7,500 credit
Ford Mustang Mach-E $3,750 credit
Ford E-Transit $3,750 credit
Plug-In Hybrids
Ford Escape Plug-In Hybrid $3,750 credit
Lincoln Corsair Grand Touring $3,750 credit
Lincoln Aviator Grand Touring $7,500 credit

As expected, all of Ford’s current EVs and PHEVs quality for at least part of the new IRA tax credit, though amounts vary by model, and each must have an MSRP of less than $80,000. The Ford F-150 Lightning is eligible for the full $7,500 incentive, while Ford Mustang Mach-E and E-Transit customers get half of that sum – $3,750. The same goes for plug-in hybrids, as the Lincoln Aviator Grand Touring is eligible for the full credit, while the Ford Escape PHEV and Lincoln Corsair Grand Touring get half as well. Commercial buyers are eligible for commercial tax incentives of as much as $7,500 on all these vehicles, too.

As Ford Authority reportedly earlier this week, these requirements are set to change on April 18th, however. The bill actually contains two different requirements – the first is the critical mineral requirement, which states that the applicable percentage of the value of the critical minerals contained in a vehicle’s battery must be extracted or processed in the United States or a country with which the U.S. has a free trade agreement – or be recycled in North America. For 2023, the applicable percentage is 40 percent, and that number increases by 10 percent each year moving forward.

The other half of this equation is the battery component requirement, which states that the applicable percentage of the value of the battery components must be manufactured or assembled in North America, a number that starts at 50 percent in 2023 and also rises by 10 percent each year moving forward. To be eligible for a $7,500 credit, vehicles must meet sourcing requirements for both the critical minerals and battery components contained in the vehicle.

Vehicles that meet one of the two requirements are eligible for a $3,750 credit, while those that meet both requirements are eligible for the full amount. Each of Ford’s eligible vehicles is assembled in North America – though given the foreign sourcing of many battery materials, it’s likely that most will only qualify for one half of these credits.

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. Jeanne Everett

    Re-changes in IRA tax credits. If I ordered my PHEV Ford Escape in November 2022 but it will not be delivered and fully purchased until May 2023, where to I stand on the IRA ? Can I get most of the $7,500 tax refund I had expected to get when I put in my order, or do the post April 18th 2023 rules apply and I would only get $3750?

    1. KPresd

      I’m in the same boat as you. I ordered my escape PHEV in September of 2022. I don’t even have a build date yet. The law states that you must have received the vehicle to get the maximum tax credit. I’ve already written my congressman. I’m really ticked about this. I would say one hand doesn’t know what the other hand is doing in our government

    2. KPresd

      Part 2. I’m jealous you ordered in November and have a build date and I ordered earlier and don’t


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