Why The 2023 Subaru Solterra Does Not Qualify For New EV Tax Credits

The Inflation Reduction Act passed the Senate and was signed into law this week, but the 2023 Subaru Solterra all-electric compact SUV does not qualify for the new tax credits. The legislation includes provisions to help millions of Americans buy new electric cars. A report from Automotive News says most electric vehicles currently on the market may not qualify for the credit, at least in the short term.

What tax credits does the 2023 Subaru Solterra currently qualify for?

The federal government currently provides a tax credit of up to $7,500 on purchasing the 2023 Subaru Solterra. But the credit is given as a tax rebate, and buyers must pay for the Solterra, then apply for a rebate when they file their next federal income taxes.

The new tax credit gives a discount on a new EV

The Inflation Reduction Act would change the rebate system by allowing Subaru retailers and other new car dealers to apply for the tax credit as a discount on the new EV at the time of purchase.

Kelley Blue Book says studies have shown that Americans would prefer an upfront discount to a tax rebate. The new bill also creates a further $4,000 federal incentive to help Americans purchase used electric cars.

Why the 2023 Subaru Solterra doesn't qualify for the new tax credit

The new Inflation Reduction Act includes a restrictive provision concerning where a new all-electric vehicle is built and where its significant components come from. This is why the 2023 Subaru Solterra does not qualify for the new tax credit.

The 2023 Subaru Solterra is manufactured at Japan's Toyota Motor Motomachi plant. The bill requires the vehicle's final assembly is in North America. The IRS clarifies that this provision "will make many vehicles like the Subaru Solterra ineligible for the incentive.

What is the price of the 2023 Subaru Solterra before the tax rebate?

The 2023 Solterra is offered in three trim levels, Premium, Limited, and Touring. Pricing for the Solterra Premium trim level starts at $46,220. The Limited trim carries a starting manufacturer’s suggested retail price of $49,720. The top-of-the-line Touring trim is priced from $53,220. Prices include destination and delivery fees ($1,225).

Because the 2023 Subaru Solterra does not meet the North American final assembly requirement, it is not eligible for the new tax credit off the purchase price when the vehicle is sold. Customers can still get the tax rebate when they file their taxes.

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Denis Flierl has invested over 30 years in the automotive industry in a consulting role working with every major car brand. He is an accredited member of the Rocky Mountain Automotive Press. Check out Subaru Report where he covers all of the Japanese automaker's models. More stories can be found on the Torque News Subaru page. Follow Denis on Facebook, Twitter, and Instagram. 

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