All 2023 Volkswagen ID.4 models will qualify for the highest $7,500 federal EV tax credit amount under the latest rules, VW confirmed Wednesday in a press release.
Local assembly of U.S.-market ID.4 crossover SUVs, as well as local battery sourcing, help allow the ID.4 to qualify for the full credit amount. New rules introduced Tuesday require North American assembly for qualifying EVs, and take into account sourcing of critical minerals and battery components.
2023 Volkswagen ID.4
As anticipated, the new rules dramatically cut the number of qualifying models—until they comply with battery raw materials requirements and are American-made (Canada and Mexico included). VW plans a lot of qualifying EVs, but it hadn't yet verified the ID.4's status with the IRS at the start of the week.
The Treasury Dept. in February clarified confusion over what constitutes an SUV vs a car—critical in establishing a vehicle price cap of $55,000 for cars and $80,000 for SUVs (as well as pickup trucks). The ID.4 is eligible at the higher price cap, although most versions would likely still qualify under the lower cap.
2023 Volkswagen ID.4
The 2023 ID.4 has a base price of $38,790 (with destination) for the new ID.4 Standard base model, with a 62-kwh gross (58-kwh usable) battery pack yielding an EPA-estimated 209 miles of range and a 201-hp single-motor rear-wheel-drive powertrain. Above that, the ID.4 Pro starts at $43,790 with the same motor configuration and an 82-kwh gross (77-kwh usable) pack, for an estimated 275 miles of range. ID.4 Pro AWD models start at $52,590 and get a dual-motor all-wheel-drive configuration, boosting output to 295 hp, with 255 miles of range.
For vehicles that don't meet the new requirements, either for local assembly and sourcing or the price caps, EV leases remains a loophole. Lucid for instance in January advertised "an automatic $7,500 in savings in the form of a capital cost reduction," using a tax deduction that allows it to take a $7,500 credit and pass the savings along to a customer in the form of a discounted lease.