Why the 2023 Subaru Solterra doesn’t qualify for the new EV tax credits

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

What tax credits is the 2023 Subaru Solterra currently eligible for?

The federal government currently offers a tax credit of up to $7,500 toward the purchase of the 2023 Subaru Solterra. But the credit is given as a tax refund, and buyers must pay for the Solterra and then apply for a refund 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 claim the tax credit as a discount on the new electric vehicle at the time of purchase.

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

2023 Subaru Solterra tax credits

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

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

The 2023 Subaru Solterra is manufactured at Toyota Motor Motomachi’s Japanese plant. The bill requires that the final assembly of the vehicle be done in North America. The IRS says 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 version carries a starting manufacturer’s suggested retail price of $49,720. The top-of-the-line Touring version starts at $53,220. Prices include destination and delivery charges ($1,225).

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

You might also like: Why it’s smart for Subaru to move away from Toyota now and make its own electric vehicles

Denis Flierl has invested more than 30 years in the automotive industry in an advisory role with all major automotive brands. He is an accredited member of the Rocky Mountain Automotive Press. Check Subaru report where it covers all models of the Japanese manufacturer. More stories can be found on the Torque News Subaru page. Follow Denis on Facebook, Twitterand instagram.

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Photo credit: Subaru USA

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