Chrysler Pacifica PHEV Keeps Its $7,500 U.S. Federal Tax Credit

The U.S. government has been promoting the use of electric vehicles (EVs) among American households, and a federal tax credit of $7,500 has helped make these vehicles more affordable. However, the Inflation Reduction Act of 2022 has introduced new restrictions on the EV tax credit, including income limits, price caps, and manufacturing requirements.

Under the new law, the credit has been split into two parts: half of a vehicle’s battery components must be manufactured or assembled in North America, and at least 40% of critical minerals like graphite, lithium, and cobalt must come from the U.S. or a trade partner. The new law goes into effect today.

The U.S. Treasury Department has published a list of EV models that meet the new requirements, with only a dozen new U.S.-made models currently qualifying. However, the list is expected to grow as more manufacturers submit data to the Department of Energy’s (DOE’s) fuel economy website.

The 2022 to 2023 Chrysler Pacifica PHEV is one model that qualifies for the full $7,500 credit. This plug-in hybrid electric vehicle has an estimated electric-only range of up to 30 miles before switching to gasoline. It can be charged using a standard 120-volt household outlet or a 240-volt charging station. The Pacifica PHEV is a popular choice for families looking for a spacious and practical minivan with the added benefit of electric driving.

The 2022 to 2023 Jeep® Grand Cherokee PHEV 4xe and Jeep Wrangler Unlimited PHEV 4xe are also among the vehicles that now qualify for 50% of the credit, or $3,750. Both models are plug-in hybrid electric vehicles that can run on electric power alone or switch to gasoline when needed. The Grand Cherokee PHEV 4xe has an estimated electric-only range of up to 21 miles, while the Wrangler Unlimited PHEV 4xe has an estimated electric-only range of up to 25 miles. In addition, both models can use a standard 120-volt household outlet or a 240-volt charging station.

The Inflation Reduction Act of 2022 also made several significant changes to the EV tax credit, such as lifting the manufacturing cap and introducing a price cap on qualifying EVs. In addition, starting in 2024, the credit can be applied at the point of sale as “cash on the hood.” However, vehicles containing battery parts from foreign entities of concern, such as China and Russia, cannot claim any credit.

A ceiling on adjusted gross income varies based on filing status to qualify for the credit. Several states offer clean vehicle rebates in addition to the federal EV tax credit, such as California’s Clean Vehicle Rebate Project (CVRP). The Energy Department’s Alternative Fuels Data Center lists state, utility, and private incentive programs.

To see an in-depth rundown on all of the changes to the Inflation Reduction Act of 2022, you can visit CNET.com.