$7,500 EV Tax Credit Is Here: Every Electric Vehicle That Saves You Money Now – CNET

The US Treasury has announced which electric vehicles meet its strict new battery component and mineral standards required to qualify for the clean vehicle credit, which is worth up to $7,500. 

Fewer than a dozen cars are eligible for the full incentive, according to the Treasury Department’s list, all from US-based manufacturers.  

The Inflation Reduction Act overhauled the EV tax break, adding income limits, price caps and other provisions. It also broke the credit into two parts: You can claim $3,750 if half of the value of your vehicle’s battery components are manufactured or assembled in North America.

Read more: Tough New Emission Standards Could Drive Up EV Sales By 60%

The other half is dependent on at least 40% of critical minerals like graphite, lithium and cobalt being sourced from the US or a trade partner.

While most of the new EV guidance went into effect in January 2023, final mineral and battery requirements were delayed until April.

For more on electric vehicles, see how many charging stations there are in your state and lay your eyes on the first hybrid Corvette.

Which models are now eligible?

For an EV received on or after April 18, 2023, to qualify for the full $7,500 credit, half of the value of its battery components must be manufactured or assembled in North America and 40% of its critical minerals must be sourced from the US or a trade partner country. 

The battery component standard increases annually until it hits 100% in 2029, while the mineral requirement ratchets up through 2027, when it will max out at 80%. 

These models remain eligible under the new provisions, which are in effect through Dec. 31, 2032.  

Qualify for full $7,500 credit

2022-2023 Chrysler Pacifica PHEV
2022-2023 Chevrolet Bolt
2022-2023 Chevrolet Bolt EUV
2023-2024 Cadillac LYRIQ
2024 Chevrolet Silverado
2024 Chevrolet Blazer
2024 Chevrolet Equinox
2022-2023 Tesla Model 3 Performance
2022-2023 Tesla Model Y AWD
2022-2023 Tesla Model Y Long Range AWD
2022 Tesla Model Y Performance

These models meet only one of the requirements and qualify for 50% of the credit, or $3,750.

Qualify for 50% of EV tax credit

2022 Ford e-Transit
2022 Ford Escape Plug-in Hybrid
2022-2023 Ford F-150 Lightning (standard and extended range)
2022-2023 Ford Mustang Mach-E (standard and extended range)
2022-2023 Jeep Grand Cherokee PHEV 4xe
2022-2023 Jeep Wrangler PHEV 4xe
2023 Lincoln Aviator Grand Touring
2022 Lincoln Corsair Grand Touring
2022-2023 Tesla Model 3 Standard Range RWD

The lists will likely grow as “some qualified manufacturers have yet to submit information,” the Treasury Department said in a statement. 

Check the Department of Energy’s fuel economy website for updates.

Which cars no longer qualify at all?

These models were eligible at the start of the year but do not meet the new standards. According to the IRS, you can still claim the credit if the vehicle was received — not just purchased — on or before April 17, 2023. 

No tax credit

Audi Q5 TFSI e Quattro
BMW 330e
BMW X5 xDrive45e
Genesis Electrified GV70
Nissan Leaf S, S Plus, SL Plus, SV and SV Plus
Rivian R1S
Rivian R1T
Volkswagen ID.4 (VW had expected to qualify for at least one credit)
Volvo S60 (PHEV), Extended Range and T8 Recharge (Extended Range)

I bought my EV in 2022. Does it qualify for the credit?

To qualify for the credit on your 2022 tax return, a vehicle must have been purchased before Jan. 1, 2023, be for your own use and be driven primarily in the US.

It must also have an external charging source and a gross vehicle weight rating of under 14,000 pounds.

To be eligible, the vehicle must also come from a manufacturer that hasn’t sold more than 200,000 EVs in the US. In practice, that makes current models from Tesla and Ford ineligible, though this stipulation has been lifted for 2023.

If you bought your EV between Aug. 17 and Dec. 31, 2022, it must have undergone final assembly in North America. 

According to the IRS, you don’t have to worry about the final assembly requirement if you “entered into a written binding contract” after Dec. 31, 2021, but before Aug. 17, 2022. (It’s a good idea to check with the IRS or your tax preparer to be certain, though.)

Below is the list of approved 2022 car models from the Department of Energy’s Alternative Fuels Data Center website. (You can also enter your automobile’s vehicle identification number, or VIN, on the Department of Energy website.)

As noted, some manufacturers have reached the maximum number of EVs they could sell and still be eligible for the full credit. 

Approved 2022 vehicles

Vehicle Manufacturer sales cap
Audi Q5
BMW 330e
BMW X5 xDrive45e (PHEV)
Chevrolet Bolt EUV Manufacturer sales cap met
Chevrolet Bolt EV Manufacturer sales cap met
Chrysler Pacifica PHEV
Ford E-Transit
Ford Escape PHEV
Ford F-150 Lightning
Ford Mustang MACH E
GMC Hummer EV Pickup Manufacturer sales cap met
GMC Hummer EV SUV Manufacturer sales cap met
Jeep Grand Cherokee 4xe
Jeep Wrangler 4xe
Lincoln Aviator PHEV
Lincoln Corsair PHEV
Lucid Air
Nissan Leaf
Rivian EDV
Rivian R1S
Rivian R1T
Tesla Model 3 Manufacturer sales cap met
Tesla Model S Manufacturer sales cap met
Tesla Model X Manufacturer sales cap met
Tesla Model Y Manufacturer sales cap met
Volvo S60 Recharge

If you purchased an EV in a previous year but missed claiming the credit, you may be able to claim it by filing an amended return for the tax year when you took possession of it.

I bought my EV in 2023 but before April 18. Is it eligible? 

These makes and models qualify for the credit if they were received between Jan. 1 and April 17, 2023, according to the IRS

All-electric vehicles

2023 BMW 330e
2023 BMW X5 xDrive45e (PHEV)
2023 Cadillac Lyriq
2023 Chevrolet Bolt EV
2023 Ford E-Transit
2023 Jeep Grand Cherokee 4xe
2023 Jeep Wrangler 4xe
2023 Lincoln Aviator PHEV
2023 Lincoln Corsair Grand Touring
2023 Mercedes EQS SUV
2023 Nissan Leaf
2023 Rivian R1S
2023 Rivian R1T
2023 Tesla Model 3
2023 Tesla Model S
2023 Tesla Model X
2023 Tesla Model Y
2023 Volkswagen ID.4

Plug-in hybrids

2023 Audi Q5 TFSI Quattro
2023 BMW 330e
2023 BMW X5 xDrive45e
2023 Chrysler Pacifica
2023 Ford Escape
2023 Jeep Grand Cherokee 4xe
2023 Jeep Wrangler 4xe
2023 Lincoln Aviator Grand Touring
2023 Lincoln Corsair Grand Touring
2023 Volvo S60 Recharge
2023 Volvo S60 t8 Recharge

What are the other changes to the EV tax credit?

The Inflation Reduction Act made several major changes to the tax credit:

  • The manufacturing cap, which disqualified automakers that have manufactured more than 200,000 EVs, has been lifted.
  • There is a price cap on qualifying EVs. For passenger cars, the manufacturer’s suggested retail price, or MSRP, must be $55,000 or less. For vans, SUVs and light trucks, the ceiling is $80,000.
  • Starting in 2024, the credit can be implemented at the point of sale as “cash on the hood,” meaning you can apply it toward the purchase price of your vehicle.  
  • Also starting next year, vehicles that contain battery parts from “a foreign entity of concern” — a classification that includes China and Russia — will be unable to claim any of the credit. For critical minerals, the cutoff is 2025.

There is also a ceiling on the adjusted gross income to qualify for the credit.

Income cap for EV tax credit

Filing status Income
Single $150,000
Head of household $225,000
Married, filing jointly $300,000
Married, filing separately $150,000

For the most part, these changes took effect on Jan. 1, 2023, and will remain in effect until Jan. 1, 2032. Always check the IRS website for updates.

Can I claim the tax credit on a used EV?

Beginning in 2023, plug-in electric or fuel-cell EVs can qualify for a credit of up to 30% of its purchase price, maxing out at $4,000.

There are certain restrictions:

  • The used EV tax credit can only be claimed once in a vehicle’s lifetime. Subsequent owners will not be eligible.
  • The MSRP of the car must be $25,000 or less.
  • The car must be at least 2 years old. If you bought it in 2023, it must be from model year 2021 or earlier.
  • Used vehicles purchased before 2023 are not eligible.
  • The vehicle must have been purchased from a qualified dealer who reports the transaction to the IRS.
  • The vehicle must otherwise meet the requirements for the EV credit.

Below are income caps for owners of used EVs wishing to claim the credit.

Used EV income cap

Filing status Modified adjusted gross income
Single $75,000
Head of household $112,500
Married, filing jointly $150,000
Married, filing separately $75,000

How do I claim the EV tax credit?

To claim the credit for an EV you took possession of in 2022, file IRS Form 8936 with your 2022 tax return. (You will need to provide the VIN for your vehicle.)

Do individual states have EV tax incentives?

In addition to the federal EV tax credit, a number of states offer rebates for clean vehicles. Some can’t be taken in conjunction with the federal credit, so be sure to get all the information before claiming anything.

California’s Clean Vehicle Rebate Project offers credits of between $1,000 and $7,000 for the purchase or lease of certain new EVs, plug-in hybrids and fuel-cell vehicles. EnergySage, an online marketplace for home solar-energy solutions, has a list of state rebate programs.

The Energy Department’s Alternative Fuels Data Center has information on various incentives offered by states, utilities and private organizations.

Do I get a tax credit for installing an EV charger?

The Inflation Reduction Act also extended the tax break for residential charging systems through 2032 and made it retroactive to Jan. 1, 2022.

It’s worth $1,000, or 30% of the cost of buying or installing the system, whichever is less.

The credit now also applies to bidirectional charging equipment, which lets you use your EV to power other appliances or even your home. Not many models have that capability, but it can be handy in an outage or other emergency.

To claim the Alternative Fuel Vehicle Refueling Property Credit, you must file IRS Form 8911

For more on EVs, find out how you can finance a home EV charger and get under the hood with Tesla’s new EV motor.