The U.S. Department of the Treasury and the Internal Revenue Service have announced a Notice of Proposed Rulemaking (NPRM) regarding the Qualified Commercial Clean Vehicle Credit, part of the Biden-Harris Administration's Inflation Reduction Act. This credit aims to lower transportation costs, bolster domestic auto manufacturing, and enhance U.S. energy security.

The proposed credit applies to qualified commercial clean vehicles such as battery electric vehicles (BEVs), plug-in hybrid EVs (PHEVs), fuel cell electric vehicles (FCEVs), and plug-in hybrid fuel cell electric vehicles (PHFCEVs). The credit is calculated as either 30% of the vehicle's basis or its incremental cost compared to a similar gasoline or diesel vehicle, with a maximum of $7,500 for cars and light-duty trucks or $40,000 for larger vehicles like electric buses and semi-trucks.

U.S. Deputy Secretary of the Treasury Wally Adeyemo stated, "The release of Treasury’s proposed rules for the commercial clean vehicle credit marks an important step forward in the Biden-Harris Administration’s work to lower transportation costs and strengthen U.S. energy security." He added that today's guidance would provide clarity needed for investment in clean vehicle manufacturing.

The NPRM outlines various methods for determining the incremental cost necessary to calculate the 45W credit amount. Taxpayers may use existing safe harbors from Notices 2023-9 and 2024-5, rely on manufacturer cost determinations, or compare costs between clean vehicle powertrains and internal combustion engines.

Additionally, it clarifies which vehicles qualify for this credit. Vehicles must be used entirely for business purposes excepting minimal personal use. The 45W credit cannot be claimed if a vehicle has already received credits under sections 30D or 45W previously.

Public comments on this NPRM are welcomed over a period of 60 days, with a public hearing scheduled for April 28, 2025.