Planning To Buy A Ford EV? Mustang Mach-E May Not Qualify For Tax Credits Next Year, F-150 Lightning Under Review

Ford Motor Co‘s F all-electric Mustang Mach-E SUV is unlikely to qualify for EV tax credits starting next year.

What Happened: Ford told in a bulletin to dealers to reach out to customers in their pipelines and close sales before year to ensure they receive the tax credit, Reuters reported. While it is unlikely Mach-E will qualify, the company is still reviewing if the F-150 Lightning EV truck will be eligible for tax credit, the report added.

Currently, Mach-E qualifies for a federal tax credit of $3,750 and the Lightning for a full $7,500. The Lightning is the sole EV from Ford to qualify for full tax credit.

The change in tax credit follows the Biden administration's latest guidance aimed at reducing Chinese content in batteries eligible for EV credits.

As per the updated guidance issued last week and required under an August 2022 law, an electric vehicle may not contain any battery components that are manufactured or assembled by a “foreign entity of concern” (FEOC) starting in 2024 if they are to be eligible for a full tax credit. FEOC is an entity that is owned by, controlled by, or subject to the jurisdiction and direction of China, Russia, North Korea, or Iran.

Why It Matters: Last month, the Lightning was Ford's best-selling EV in the U.S. followed by the Mach-E SUV. Sales of Lightning jumped a noteworthy 113% to 4,393 while the electrified SUV sales bumped up 21.3% to 4,294 units.

EV giant Tesla Inc TSLA, meanwhile, has said that the tax credit for merely the Model 3 RWD and Long Range would be halved starting next year. The two versions of Model 3 are now eligible for a full tax credit of $7,500 but will only be eligible for $3,750 starting next year.

Tesla’s SUVs which are currently eligible for tax credit include all versions of the Model Y and also the long-range version of its more premium Model X. Tesla does not see the tax credit for any of these vehicles being cut.

Check out more of Benzinga's Future Of Mobility coverage by following this link.

Read Next: Tesla Is Now Operating Two High-Tech Drones Named After Mars Rovers At Its Berlin Gigafactory