Treasury Department Allows Consumer EV Leases To Qualify For Clean Vehicle Tax Credits

The U.S. Treasury Department said on Thursday that electric vehicles leased by consumers can qualify starting Jan. 1 for up to $7,500 in commercial clean vehicle tax credits, a decision that makes those assembled outside North America eligible.

South Korea, Europe and some automakers this month sought approval to use the commercial electric vehicle tax credit to boost consumer EV access. Automakers said the credit could be used to reduce leasing prices.

But when it comes to purchases, the new Treasury guidance does not change the definition of what constitutes North American assembly. The $430 billion U.S. Inflation Reduction Act (IRA) passed in August ended $7,500 consumer tax credits for purchases of electric vehicles assembled outside North America, angering South Korea, the European Union, Japan and others.

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