Which Electric Vehicles Currently Qualify for Tax Credits

Key Takeaways

• 13 Electric Vehicles are currently eligible for a full $7,500 tax credit, with several others qualifying for a partial tax credit of up to $4,000
• Starting in 2024, new EV buyers will be able to use their federal tax credits toward their dealership down payments
• While the new regulations could prove great for buyers, they could cause issues for dealerships

The Treasury Department has recently updated its list of which new electric vehicles and plug-in hybrids could be eligible for federal tax credits of up to $7,500. The actual amount depends on a variety of factors, including where the EV is manufactured, where their battery components and minerals are sourced, how much they cost, and how much the buyers earn.

In addition, starting on January 1, 2024, the updated legislation will allow eligible buyers to transfer their tax credits to the dealerships — meaning that these credits can be put toward their down payments for new cars.

Which new car purchases could qualify for a full EV tax credit?

As advised by the IRS, 13 electric vehicles are eligible for a full $7,500 tax credit, provided the other requirements are met, such as buyer income and vehicle MSRP. The eligible vehicles are as follows:

• Cadillac Lyriq (2023–2024 models, MSRP $80,000 or lower)
• Chevrolet Blazer (2024 model, MSRP $80,000 or lower)
• Chevrolet Bolt (2023–2024 models, MSRP $55,000 or lower)
• Chevrolet Bolt EUV (2022–2023 models, MSRP $55,000 or lower)
• Chevrolet Equinox (2024 model, MSRP $80,000 or lower)
• Chevrolet Silverado EV (2024 model, MSRP $80,000 or lower)
• Chrysler Pacifica PHEV (2022–2024 models, MSRP $80,000 or lower)
• Ford F-150 Lightning (2022–2023 models, MSRP $80,000 or lower)
• Lincoln Aviator Grand Touring PHEV (MSRP $80,000 or lower)
• Tesla Model 3 Performance (2022–2023 models, MSRP $55,000 or lower)
• Tesla Model X Long Range (2023 model, MSRP $80,000 or lower)
• Tesla Model Y All-Wheel Drive, Long Range, and Performance (2022–2023 models for AWD and Long Range, 2022 for Performance, MSRP $80,000 or lower)
• Volkswagen ID.4 (2023 model, MSRP $80,000 or lower)

Which new car purchases could qualify for a partial EV credit?

Provided vehicle MSRP and buyer income requirements are met, several electric and plug-in-hybrid-electric vehicles are currently eligible for a partial tax credit of $3,750 if they’re put into service after April 18, 2023:

• BMW X5 xDrive50e PHEV (2024 model, MSRP $80,000 or lower)
• Ford Escape PHEV (2022 and 2023 models, MSRP $80,000 or lower)
• Ford E-Transit (2022 and 2023 models, MSRP $80,000 or lower)
• Ford Mustang Mach-E (2022 and 2023 models, 2022 and 2023 models, MSRP $80,000 or lower)
• Jeep Wrangler 4xe PHEV (2022, 2023, and 2024 models, MSRP $80,000 or lower)
• Jeep Grand Cherokee 4xe PHEV (2022, 2023, and 2024 models, MSRP $80,000 or lower)
• Lincoln Corsair Grand Touring PHEV (2022 and 2023 models, MSRP $80,000 or lower)
• Rivian R1S (2023 model, MSRP $80,000 or lower)
• Rivian R1T (2023 model, MSRP $80,000 or lower)
• Tesla Model 3 Standard Range Rear-Wheel Drive only (2022 and 2023 models, MSRP $55,000 or lower)

The bottom line

The Treasury Department built the new rules for EVs qualifying for tax credits around the goal of prioritizing EV manufacturing toward the U.S. and its trade partners, and away from China. In general, to qualify for the tax credits, the vehicle must be assembled in North America, including Canada and Mexico.

As a buyer interested in the federal tax credits, however, there’s plenty of rules and stipulations that you need to be aware of before making a purchase — so be sure to look at the IRS’ official guidelines on who qualifies before pulling the trigger.

On the plus side, you’ll soon be able to immediately assign these tax credits toward the car’s down payment, making the entire process — both the purchase as well as your tax returns — a whole lot simpler.