The electric vehicle tax credit, also known as the “clean vehicle tax credit,” or 30D, if you like IRS code, can offer up to $7,500 off the purchase of a new EV. Sounds nice, right?
But of course, it’s not that easy. This is the IRS we’re talking about after all.
Before you can collect your $7,500 credit from the government, there are a few rules that must be satisfied — rules about where the vehicle is made, where the battery is made, where the minerals are processed, the price of the vehicle, your own annual income, and much, much more.
If you thought it would be as easy as walking into a dealership, picking out the EV of your choosing, and collecting your credit, you were sorely mistaken.
The EV tax credit is more than just an incentive to get Americans to ditch their dirty gas-powered cars and replace them with clean, quiet zero-emission vehicles. It’s also an energy security measure aimed squarely at busting up China’s influence over the EV battery industry.
Will it succeed? Automakers are falling over themselves to set up manufacturing operations in North America in order to comply with the rules. And car buyers are making decisions based on which cars are eligible.
In addition to the stories listed below, here are a few resources to help you figure out if the car you want qualifies for the $7,500 credit:
The list of eligible vehicles is very fluid. Cars are being added, removed, and being re-added. It will likely remain this way for a while as the auto industry acclimates to the rules and customers continue to lean toward those vehicles that qualify.
But one thing is for sure: the tax credit will continue to loom large over the industry’s shift to electric. Just be sure to talk to an accountant before you try to claim it.
Jul 10
Carvana will apply a clean vehicle tax credit at checkout for used EVs
Carvana is now offering discounts of up to $4,000 at checkout for eligible used EVs and plug-in hybrids. The discount is essentially an advancement of the federal tax incentive for previously owned vehicles, but it lets customers reap the benefit immediately rather than waiting for tax refunds the following year.
Read Article >You will still need to file your taxes correctly using IRS Form 8936, and you have to agree to transfer the credit to Carvana once you do file. So, while it’s not making tax season any easier, Carvana is offering a lower cost of entry to buy an electric vehicle, which could help push customers interested in EVs to take the leap. Carvana will help you, though, as representative Hayley Pollack tells The Verge in an email:
Jul 9
Republicans won’t stop trying to kill Biden’s EV tax credit
House Republicans advanced an effort to void the Biden administration’s EV tax credits, even as electric vehicle sales in the US continued to grow year over year.
Read Article >The House Ways and Means Committee voted in favor of a bill that would undo the federal EV tax credits, arguing that the rules would result in US taxpayer dollars flowing to Chinese companies. The tax credits were “pushed by radical environmentalists and some EV producers” and should therefore be struck down, according to a House Republican fact sheet.
Jun 2
Hyundai’s first US-built EV will be the tax credit-ready Ioniq 5
The Hyundai Ioniq 5 will reportedly be the first car rolling out of the company’s new Georgia factory this fall. Moreover, company CEO Jose Muñoz tells Automotive News he expects the US-made version will net buyers the full $7,500 federal EV tax credit, which the South Korea-made vehicle isn’t otherwise eligible for (outside of a leasing loophole).
Read Article >Hyundai will start producing the Ioniq 5 at the Georgia plant in October, but the company won’t be making batteries there for “about a year,” Automotive News writes. For now, the article says the company will source its batteries from a Hungarian factory operated by Hyundai’s partner for its Georgia battery production, SK On.
May 3
Biden grants automakers some flexibility on battery minerals in final EV tax credit rules
The Biden administration is giving automakers a little leeway around some of the strict rules regarding eligibility for the government’s $7,500 tax credit.
Read Article >The final guidance, which was released today, gives car companies a two-year exemption from provisions in the Inflation Reduction Act (IRA) intended to disqualify EVs with battery minerals from countries like China, Russia, Iran, and North Korea — so-called “foreign entities of concern” (FEOC).
May 1
Joe Biden is racing to finalize the EV tax credit rules before November for some reason.The Treasury Department is set to announce later this week the final set of rules around critical minerals in EV batteries, that will likely target “foreign entities of concerns” — which is government jargon for China. The rules won’t kick in until 2025, at which point the list of EVs eligible for the $7,500 credit is likely to shrink even more.
Mar 8
Chevy lifts stop-sale order on glitchy Blazer EV — and slashes prices
Chevy lifted the stop-sale order on the Blazer EV that was put in place last December after numerous owners and reviewers reported significant issues with the vehicle’s software, including blank infotainment screens and error messages while charging.
Read Article >Chevy rolled out a software update that it says should fix the problems as well as provide a few enhancements for Blazer EV owners. In addition, Chevy announced it was cutting the Blazer EV’s price by an average of $5,900 and that the vehicle will qualify for the full $7,500 federal EV tax credit when sales resume.
Mar 7
Honda gets credit.The 2024 Honda Prologue, which just started shipping to customers, will be eligible for the full $7,500 federal EV tax credit, the automaker said today. Plus customers can get the credit at the dealership, instead of as a tax rebate the following year. Would you pay around $41,000 for an EV that’s basically a Chevy Blazer with Honda styling?
All-Electric 2024 Honda Prologue Qualifies for $7,500 U.S. EV Tax Credit[Honda Automobiles Newsroom]
Jan 17
Rivian adds R1S SUV to its leasing program.Customers in a handful of states have been able to lease the R1T electric truck since last November. Now the R1S SUV is getting in on the action. Prices depend on the trim and motor configuration. For example, a quad-motor R1S with the large battery pack can be had for $1,157 a month, excluding taxes and fees.
And while customers who buy the R1S can only get half of the $7,500 EV tax credit in the US, those who lease the SUV get access to the whole credit.
Jan 2
Just a handful of EVs still qualify for the full $7,500 tax credit
The list of electric vehicles that qualify for the full $7,500 federal tax credit in the US has shrunk — considerably.
Read Article >Thanks to new requirements about battery minerals and sourcing that kicked in on January 1st, only five battery electric vehicles are eligible for the full credit as well as one plug-in hybrid vehicle. A few more qualify for the $3,750 half credit. And that’s about it.
Dec 6, 2023
A bunch of EVs are going to lose their tax credit starting January 1st
Electric vehicles with batteries that contain minerals and materials sourced from China won’t be eligible for the $7,500 federal EV tax credit starting on January 1, 2024, according to guidelines recently released by the Internal Revenue Service.
Read Article >That means a lot of EVs are about to lose their eligibility — chief among them, the Ford Mustang Mach-E. Ford sent out a notice to dealers recently stating that it is “unlikely that any Mustang Mach-Es will qualify for the Federal Tax Credit beginning on 1/1/24,” according to a report in Cars Direct.
Dec 4, 2023
Tesla warns that the Model 3 is about to lose half of its tax credit in the US
A federal tax credit funded through the Inflation Reduction Act can currently shave up to $7,500 off the price of Tesla’s Model 3, but that’s about to drop in half. The tax credit will fall to $3,750 by January 1st, 2024 for the Model 3 Rear-Wheel Drive and Model 3 Long Range, the company warned.
Read Article >Elon Musk’s company made the announcement via a banner on Tesla’s website, TechCrunch reports. Starting at around $36,000, the Model 3 comes with the lowest cost of any Tesla vehicle. Now, Tesla says the full tax credit will only be available to deliveries made through December.
Oct 6, 2023
EV buyers will get an instant rebate of as much as $7,500 starting in 2024
The Treasury Department released new guidance Friday outlining how car dealers can give customers instant access to the electric vehicle rebate starting in January 2024. It’s the latest move by the Biden administration to bring down the cost of EVs in the hopes that more people will buy them.
Read Article >The new guidance lays out how dealers can effectively reduce the price of an EV by as much as $7,500 at the point of purchase rather than the customer having to wait until they file their taxes to claim the credit.
Jun 3, 2023
Tesla claims every new Model 3 now qualifies for $7,500 EV tax credit in US
The starting price of a Tesla Model 3 — after federal tax credits — may once again be below the fabled $35,000 mark. Tesla’s website now claims every new Model 3 is eligible for the full $7,500 federal tax credit in the United States, after those credits were previously cut in half on April 18th for the entry-level Standard Range and Long Range RWD models.
Read Article >Here in California, a short distance from Tesla’s Fremont factory, I would pay $41,630 before tax — but only $32,130 after federal and state incentives, assuming Tesla is correct that its cars now qualify for the full federal credit. It could cost less under $30,000 depending on your state’s incentives.
Apr 20, 2023
Rivian’s electric truck and SUV will qualify for a partial tax credit.Two days after the IRS published its list of EVs eligible for the federal tax credit, Rivian’s R1T truck and R1S SUV are back on. But the vehicles will only qualify for the half credit of $3,750, and only if you buy the version that costs less than the $80,000 MSRP cap. That’ll be tough, but it is technically possible. Two versions of the R1T, the dual motor with standard battery pack and the one with the larger battery, both retail for under $80,000, while only one version of the R1S will qualify.
Apr 19, 2023
Volkswagen ID.4 electric SUV will qualify for the full $7,500 tax credit, automaker says
Volkswagen’s flagship electric vehicle, the ID.4 crossover SUV, is eligible for the full $7,500 federal EV tax credit, the automaker announced Wednesday. The federal government’s list of eligible vehicles has since been updated to include all trim levels of the ID.4.
Read Article >Volkswagen is currently the only international automaker to have a full battery electric vehicle that is eligible for the full credit. The ID.4 is assembled in Chattanooga, Tennessee, which is one of the prerequisites for eligibility. Earlier this week, the federal government released its list of EVs that qualify for the tax credit. The VW ID.4 was initially left off, but as of today, it’s back on.
Apr 17, 2023
Good luck finding those 10 EVs that qualify for the $7,500 tax credit right now.A lot of publications, including the New York Times, are saying 10 models are currently eligible for the tax credit. But that’s bullshit. Three of those vehicles — the Chevy Silverado, Blazer, and Equinox EVs — don’t go on sale until later this year. And a lot of the other vehicles on this list are basically impossible to buy right now. The Cadillac Lyriq is sold out for the rest of the year. The Ford F-150 Lightning is just now returning to production after a battery fire messed things up. In short, nearly half of this list is vaporware. So let’s be real: there’s really only six EVs that qualify.
Apr 17, 2023
Only six EVs still qualify for the $7,500 federal tax credit after new rules go into effect
The Internal Revenue Service released its list of electric vehicles that will still qualify for the $7,500 federal EV tax credit after strict new supply chain rules go into effect on April 18th. And oh boy, is it short.
Read Article >Big winners include Tesla, Ford, Chrysler, Jeep, and General Motors. Gone from the list are heavy hitters like Volkswagen, BMW, Nissan, Hyundai, and Rivian. The revised list is sure to change as more battery factories come online in the US, but for now, the list of qualifying vehicles is significantly shorter than its ever been.
Mar 31, 2023
Fewer EVs will qualify for the federal $7,500 tax credit under updated rules
The Biden administration released a long-awaited update to the rules governing which electric vehicles are eligible for a tax credit, and while we still don’t know which vehicles will meet the new standards, one thing is for sure: fewer EVs are going to qualify.
Read Article >The new rules, which were published by the Treasury Department on Friday, address outstanding issues related to the source of the critical minerals contained within an EV battery. Under the Inflation Reduction Act (IRA), only electric vehicles with battery materials sourced from the US and its approved trading partners will qualify for the $7,500 credit.
Feb 9, 2023
Lucid joins the EV price war with a $7,500 credit for its luxury Air sedan
Lucid is giving buyers a $7,500 credit when purchasing some models of its luxury Air electric sedans. The company is the latest EV maker to offer a discount in what some auto industry experts see as a slowly developing price war for plug-in models.
Read Article >“The credit is applied at the time of purchase and will appear on the purchase agreement,” Lucid’s public relations manager for technology Justin Berkowitz tells The Verge.
Feb 4, 2023
Tesla bumps up Model Y price after EV tax credit adjustment
Tesla raised the price of its Model Y electric vehicle (EV) just hours after the US Treasury Department adjusted its EV tax credit rules, as first reported by Bloomberg. While the Tesla Model Y Long Range now costs $1,500 more at $54,990, the Model Y Performance went up by $1,000 to $57,990, excluding shipping fees.
Read Article >On Friday, the Treasury Department updated the way it classifies vehicles that qualify for its $7,500 EV tax credit as part of the Inflation Reduction Act (IRA). The change should allow more vehicles — including the Model Y — to qualify for the credit, as it no longer puts certain SUV crossovers in the same category as sedans.
Feb 3, 2023
The Treasury Department just fixed the EV tax credit’s Tesla Model Y problem
The US Treasury Department says it is modifying the electric vehicle tax credit to potentially allow more vehicles to qualify — for now.
Read Article >In a press release, the department said that to determine whether a vehicle is a sedan, SUV, pickup truck, or van, it would use the Environmental Protection Agency’s Fuel Economy Labeling standard rather than the EPA’s corporate average fuel economy, or CAFE, standard.
Jan 25, 2023
Joe Manchin is trying to derail the EV tax credit he helped craft
West Virginia Senator Joe Manchin (D) introduced a new bill that would halt the current electric vehicle tax credit until strict new battery requirements are put in place. It’s the latest move by the conservative Democrat to limit the government’s ability to incentivize car buyers to shift to less polluting vehicles.
Read Article >Manchin, who had a hand last year in crafting the EV tax credit that was included in the Inflation Reduction Act (IRA), placed the blame on the Internal Revenue Service for blowing past its December 31st, 2022 deadline to release guidance on the battery requirements.
Jan 3, 2023
Why Tesla’s Model Y might not be eligible for the new EV tax credit
If you were waiting until after New Year to pick up a Tesla Model Y in hopes it’d qualify you for the new federal tax credit, you might be in for a disappointment. The IRS released a 2023 list of vehicles that qualify for the new $7,500 incentive, and while Tesla’s popular SUV is on it, the most common five-seater versions won’t be eligible.
Read Article >According to EPA classifications, all versions of the Tesla Model Y are supposed to be under the “small SUV” category. But it would seem the IRS is treating five-seater and seven-seater models differently for tax eligibility, the former being treated as a car and the latter as an SUV.
Jan 1, 2023
A partial list of all the EVs that qualify for the new $7,500 tax credit
As of January 1st, 2023, a bunch of electric vehicles became newly eligible for the $7,500 tax credit, which passed into law as part of the $430 billion Inflation Reduction Act a year ago.
Read Article >Some models new to the list had lost their eligibility when their manufacturer hit the previous credit’s sales cap of 200,000 vehicles (Tesla models, Chevy Bolts). Others have recently shifted their production to North America, meeting one of the crucial requirements (VW ID.4).
Dec 20, 2022
The EV tax credit rules are being delayed until March 2023 — here’s what that means for you
Besides its more obvious stated goal of reducing inflation, the Biden administration’s Inflation Reduction Act (IRA) was designed to force profound changes in the electric vehicle market. The legislation revises EV tax credit rules as it seeks to build up domestic battery manufacturing so that the US doesn’t cede the supply chain to China.
Read Article >It’s also profoundly confusing, hinging new EV tax credits not just on where the cars are built but also where batteries are assembled and where battery materials are sourced from. These rules were all supposed to take effect on January 1st, 2023 — that’s next weekend for anyone keeping track.