The new federal tax credit under the Inflation Reduction Act has been the center of attention in the automotive industry these past few months. Now, customers are urged by the Internal Revenue Service (IRS) to comment on the eligibility requirements for electric vehicles, according to Teslarati.
Concerns have emerged regarding the disqualification of some EVs from the federal tax credit. Some EVs, such as a few Tesla Model Y variants and the Ford Mustang Mach-E, would not get any IRA incentives. Meanwhile, some ICE vehicles qualify.
How to submit the comments?
Relevant comments from interested customers must be submitted only by mail or email.
For email submission, your subject line must contain “OMB Control No. 1545-2137,” and the recipient must be pra.comments@irs.gov.
Meanwhile, the mail submissions must be addressed to Andres Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224.
Qualified Tesla Models
Tesla was able to qualify some of its EVs in the eligible list. However, Tesla Model Y’s seven-seven-seat varieties are only the qualified SUV with a limit of $80,000 MSRP.
“This means Tesla Model Y, a pure EV with a 330-mile range, 117 MPGe (very efficient), and SUV form factor is not eligible for the $7,500 tax credit.”
For reference, below are the Tesla EV Models that qualified for the IRA incentives:
| Model Year | Vehicle Description | Applicable MSRP Limit |
| 2022, 2023 | Tesla Model 3 Rear Wheel Drive | $55,000 |
| 2022, 2023 | Tesla Model 3 Long Range | $55,000 |
| 2022, 2023 | Tesla Model Y All-Wheel Drive – 7 seat variant (3-rows) | $80,000 |
| 2022, 2023 | Tesla Model Y Long Range – 7 seat variant (3-rows) | $80,000 |
| 2022, 2023 | Tesla Model Y Performance – 7 seat variant (3-rows) | $80,000 |
| 2022, 2023 | Tesla Model Y All-Wheel Drive – 5 seat variant (2-rows) | $55,000 |
| 2022, 2023 | Tesla Model Y Long Range – 5 seat variant (2-rows) | $55,000 |
2022, 2023 | Tesla Model Y Performance – 5 seat variant (2-rows) | $55,000 |
Farzad Mesbahi initiated the petition “Fix the Inflation Reduction Act EV Tax Credit” after raising the issue. The petition has 19,525 signatures as of January 3, 2023.
Notably, the petition claimed that even while the Environmental Protection Agency classifies the Tesla Model Y as an SUV, the IRS does not.
It would be really disappointing if the Tesla Model Y would not qualify for the IRA incentives, as it is one of the most popular EVs worldwide. That said, many customers who anticipate buying it this year might be discouraged due to its disqualification to the federal tax credits.
