This Last-Minute Change To Tax Incentives Could Save You $7,500 On An EV Lease

In the ongoing race to corner the market in electric vehicles, with everything from Ford and Kia to Lotus and Rolls-Royce betting both cash and reputation on the ascendancy of the battery, it's easy to forget that people still need to buy the dang things. Both dedicated EV manufacturers like Tesla and automotive OGs with healthy electric product lines like GM are building their business on the basis that electric cars will dominate the market in the coming years.

As yet, that's not a done deal. Per Pew Research, only 7% of American motorists were driving electric vehicles as of the end of last year. Gasoline dominates worldwide as well, and surveys on the subject show several reasons why active drivers aren't yet sold on the EV concept. In the current car market, prospective buyers still need a reason to go electric. The government may have just given them one, at least in the United States. The U.S. Treasury Department has just unveiled a major benefit for motorists interested in an electric ride.

As Reuters reports, the U.S. Treasury Department has confirmed a major expansion in a $7,500 tax credit available to drivers of electric vehicles. Per the Treasury, leased vehicles as well as purchases will be eligible for that benefit. Leased vehicles are also free of several restrictions put on the $7,500 tax credit, including income caps for prospective buyers.

This announcement addresses a key policy change in the Inflation Reduction Act, which was passed in August. Republicans (and some Democrats) representing states rich in fossil fuels pushed for restrictions on the bill's $7,500 tax credit for electric vehicle purchases. The bill eventually went ahead with the $7,500 available only to car buyers who purchased vehicles assembled in the United States.

That final compromise is part of what got the bill over the finish line. Per Reuters, it also angered several of America's key strategic allies, particularly the EU and South Korea, both of which host several major EV manufacturers. Treasury's new policy makes the $7,500 tax credit available to the millions of Americans — nearly a fifth of the entire American new car market — who lease their cars. It also provides an opening for cars built in allied countries: the tax credit is only limited to American makes on car purchases. Drivers who lease foreign cars are still eligible for the government's $7,500 discount.