The Inflation Reduction Act has a stipulation where Pure Electric Vehicles and Hybrid Electric Vehicles are able to take advantage of up to $7,500 as Federal Tax Credits when purchasing these types of vehicles.

This was crafted so that the US would become a powerhouse in electric vehicle manufacturing and secure a local supply chain in order to advance the advent of sustainable transport built by American workers.

Here are the primary qualifications for the EV tax credit:

 

However, the way these are currently being interpreted, it has created a host of issues and incorrect incentives, both for the public and for automakers. Some automakers are being unfairly treated, while others are getting a benefit they do not deserve.

Here's an example of the broken nature of this incentive in its current form:

 

Two main issues that are causing this:

• The IRS is not categorizing the Tesla Model Y as an SUV, even thou the EPA does. This means Tesla Model Y, a pure EV with 330 mile range, 117 MPGe (very efficient), and SUV form factor is not eligible for the $7,500 tax credit.
• On the other hand as an example, you have a Jeep Grand Cherokee 4xe, with a Gas engine, getting 23 MPG (very inefficient), and 25 miles of electric range, that gets the $7,500 tax credit.

At best, this is a pretty severe lack of negligence by the IRS to properly categorize vehicles. At worst, it's corruption against companies like Tesla in order to benefit a dying legacy auto industry by giving them EV tax credits for vehicles that are anything but EVs.

Instead of funding the next generation of the American economy, tax payers are now funding old technology in large, inefficient gas vehicle auto makers. This is a gross miss use of taxpayer dollars.

Ideal fix:

• Remove incentives for all hybrid vehicles and only have them apply to pure EVs.
• Apply SUV/Non SUV rules fairly, across the board, with consistency in order to CORRECTLY incentivize automakers and the public with the original intent of the bill.

Next best fix:

• Apply SUV/Non SUV rules fairly, across the board, with consistency in order to CORRECTLY incentivize automakers and the public with the original intent of the bill.

To the IRS and Government officials - please use this chance to prove to the American taxpayer that these categorizations are done in error. Otherwise, it will be yet another reason for the American tax payer to doubt your true intentions.

At best, this current categorization is negligent and/or incompetent.

At worst, it's corruption.

Fix it.