According to new reports from the automobile industry, most German luxury EVs on American roads are leased and not bought. This might come as a shocker to you as this affects top automobile brands like Audi, BMW, and Mercedes-Benz. Well, the reason behind this shocking reveal is the Inflation Reduction Act bill that was passed in 2022 and went into review a while after its announcement.
This particular bill prevents most potential buyers from purchasing a German luxury EV due to high taxation on the vehicle. While this taxation prevents potential buyers from purchasing and owning any EV from the likes of Audi, BMW, and Mercedes-Benz, it doesn’t stop them from driving them. Now, most buyers who want to get into any German luxury EVs lease the vehicles from dealers across America to avoid the heavy taxes on the vehicles.
You might be asking yourself what this Inflation Reduction Act bill is and why it imposes high taxes on German luxury EVs. Well, just like the name states, this is a bill that helps the American government curb inflation within their region. It enforces self-dependency on goods that the country makes use of, ensuring that manufacturing processes use home-sourced raw materials.
To start with, most of these German luxury EVs aren’t produced in America and source goods from regions like China. This means that they don’t apply for a tax credit, hence the reason they are heavily taxed. These heavy taxes on German luxury EV purchases in the region make it hard for American citizens to purchase these vehicles.
Up to 90% of Audi and BMW EVs in America are leased, while Mercedes-Benz manufactures their EQE and EQS models on American soil. However, these vehicles are still affected by high taxation as a result of their pricing which starts above the $80,000 price point, making them ineligible for the tax cut. Some might also point out that lots of users of luxury vehicles prefer to lease than buy, but this doesn’t nullify the fact that German luxury EVs are heavily taxed in America.