You’re not alone if you’ve become somewhat confused about the tax credit given to consumers who buy an electric vehicle. After the U.S. Treasury Department and the IRS changed the rules about which vehicles are eligible for the full $7,500 tax credit, it’s a slippery slope to tackle. Many excellent EVs, such as the Nissan Leaf and Hyundai Ioniq 5, are no longer available because the federal government is prioritizing EVs primarily made in the United States.
But if you’ve fallen in love with the 2024 ID.4 near Rio Rancho, NM, you’re in luck! Volkswagen has confirmed that their EV for the people, the ID.4 crossover, is still eligible for the entire federal tax credit under the latest rules, which makes it the only vehicle from a foreign automaker that makes the cut. The list of eligible vehicles has even been updated to include every trim level of the ID.4.
So, what happened to get the VW ID.4 on the “approved” list? Volkswagen has moved production of the ID.4 from Germany to Chattanooga, Tennessee. Stateside assembly of the crossover intended for the U.S. market, along with domestic battery sourcing, have helped the ID.4 qualify for the total credit amount. The new rules introduced in August of 2022 with the Inflation Reduction Act of 2022 require assembly in North America (U.S. or qualifying trade partner) for qualifying vehicles, as well as local sourcing of critical minerals and other battery components.
The ID.4’s battery pack, consisting of 288 pouch cells in 12 modules, was initially made by South Korea’s LG Chem. Volkswagen switched their battery sourcing to SK Innovation, another company from South Korea, which recently opened a $2 billion factory near the Chattanooga VW plant. As was anticipated, the changed rules significantly reduced the number of EVs that qualify, that is, until they comply with requirements on batteries’ raw materials and are American-made (including Canada and Mexico).
If the initial confusion wasn’t enough, there are rules about what constitutes a car vs. an SUV, since vehicle eligibility is also based on sticker price. This information is critical to determining a vehicle price cap of $55,000 for cars and $80,000 for SUVs (and pickup trucks). The 2024 ID.4 near Rio Rancho, NM is eligible at the higher amount, although most varieties would likely still meet the requirements under the lesser price cap.
Pricing isn’t out yet for the 2024 models, but the 2023 ID.4 starts at $38,790 (including the destination charge) for the Standard base model. This version gets a 62-kWh battery pack with a 201-hp single-motor rear-wheel drive powertrain and an EPA-estimated range of 209 miles.
The ID.4 Pro has the same motor configuration but an 82-kWh battery pack, which yields an estimated 275 miles of range. Its starting price is $43,790. The top model is the ID.4 Pro S AWD, which starts at $52,590 and boasts a dual-motor all-wheel drive powertrain that increases output to 295 horsepower. The range is slightly lower, with an estimated 255 miles.
To learn more, visit the dealership of Fiesta Volkswagen located at 8201 Lomas Blvd NE, Albuquerque, NM 87110.