The big climate and health care bill signed into law by President Biden has what at first sight looks like a big incentive for those shopping for a car: a revamped $7,500 tax credit if you buy a new electric vehicle, or $4,000 if you get a used one.
Although tax credits for electric cars have been offered before, the new bill revamps those incentives. But there are so many caveats – on everything from the buyers’ income level to which models can qualify – that many electric cars may actually not be eligible for the tax credit.
Nonetheless, the caveats are there for two key reasons: to eventually make electric cars more affordable for more Americans and to bring more of the production across the supply chain to the U.S.
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