If you’re thinking about buying an electric vehicle this year, you may be able to save some money, either up front or later.
People who buy new electric vehicles may be eligible for a tax credit of up to $7,500, and buyers of used electric cars may qualify for up to $4,000. Consumers can choose to claim the credit on their taxes or transfer it to an eligible dealer for an immediate discount on the vehicle at the time of purchase.
The electric vehicle tax credit is a federal tax benefit for those who buy qualifying new or used electric vehicles. Here’s how much it’s worth and how to claim it.
What is the EV Tax Credit?
The electric vehicle tax credit is a nonrefundable tax credit offered to taxpayers who purchase qualifying electric vehicles or plug-in hybrid vehicles. To qualify, your income must be below certain thresholds and the vehicle you plan to purchase must also meet several IRS specifications, including price limits and manufacturing guidelines.
Beginning in 2024, taxpayers can choose to pass the tax credit on to an eligible dealer instead of claiming it on their tax returns the following year. This allows the dealer to reduce the cost of the vehicle by the applicable credit amount for an immediate discount at the point of sale.
Will EV Tax Credit be available in 2025?
Despite the influx of new electric vehicles entering the market, the list below is comparatively short due to stricter government requirements on eligibility and new rules that went into effect on January 1, 2024 regarding battery supply.
Changing battery supply requirements for 2025 reduced the number of new electric vehicles and plug-in hybrids that qualify for the credit by more than half on January 1, and more vehicles will join the list throughout the year as automakers shift battery supply and determine which of their vehicles will remain eligible, including some from Ford, Nissan, GM and Tesla.
Update: Reports that the Trump administration plans to end all federal credits for electric and plug-in hybrid vehicles mean this list could soon become obsolete. We will monitor the situation closely and update this story with any changes.
Which Cars Qualify for a Federal EV Tax Credit?
The IRS urges taxpayers to use the FuelEconomy.gov website tool to get the most up-to-date information on eligible models. You can filter by purchase scenario, model year and vehicle type and determine which car is eligible based on its delivery date. Be sure to check with the dealer as well, the IRS warns, because some versions of the cars listed below may not qualify.
Know: Why It’s a Good Time to Lease an Electric Vehicle
Which EVs Are Eligible for $7500 Tax Credit?
Beginning in February 2025, the following all-electric and plug-in hybrid vehicles may be eligible for a full or partial tax credit if delivered on or after January 1, 2025.
Below are the vehicles currently deemed eligible by the EPA for the up to $7,500 New Vehicle Tax Credit. This list will be updated continuously (you must select the year of delivery from the drop-down menu to get the list). The credit amount listed is based on the size and source of the battery.
| Car Make and Model | Tax Credit Amount | MSRP Limit |
|---|---|---|
| Acura | ||
| ZDX (2024-2025) | $7,500. | $80,000. |
| Cadillac | ||
| LYRIQ: Luxury and Sport Models (2024-2025) | $7,500. | $80,000. |
| OPTIQ (2025) | $7,500. | $80,000. |
| Chevrolet | ||
| Blazer EV: LT, RS and SS Models (2024-2025) | $7,500. | $80,000. |
| Equinox EV: LT and RS Models (2024-2025) | $7,500. | $80,000. |
| Silverado EV: LT Model (2025) | $7,500. | $80,000. |
| Chrysler | ||
| Pacifica PHEV (2024-2025) | $7,500. | $80,000. |
| Ford | ||
| F-150 Lightning: FLASH Trim (2024-2025) | $7,500. | $80,000. |
| F-150 Lightning: LARIAT and XLT Trim (2023–2025) | $7,500. | $80,000. |
| Honda | ||
| Prologue (2024-2025) | $7,500. | $80,000. |
| Jeep | ||
| Wagoneer S (2025) | $7,500. | $80,000. |
| Kia | ||
| EV6 (2026) | $7,500. | $80,000. |
| EV9 (2026) | $7,500. | $80,000. |
| Tesla | ||
| Cybertruck: Single and Dual Motor (2025) | $7,500. | $80,000. |
| Model 3 Long Range: AWD and RWD (2025) | $7,500. | $55,000. |
| Model 3 Performance (2025) | $7,500. | $55,000. |
| Model X AWD (2025) | $7,500. | $80,000. |
| Model Y Long Range: AWD and RWD (2025) | $7,500. | $80,000. |
| Model Y Performance (2025) | $7,500. | $80,000. |
Jump To: 2025 Chevy Silverado EV $699/mo Lease
Vehicles no longer eligible for the EV tax credit in 2025
Most of these electric vehicles fall into two categories: they are no longer for sale or they do not meet the battery supply requirements that came into effect in 2025.
- Audi Q5 PHEV
- Chevy Bolt EV
- Jeep Grand Cherokee 4xe
- Jeep Wrangler 4xe
- Lincoln Corsair Plug-in Hybrid
- Rivian R1S
- Rivian R1T
- Volkswagen ID.4
Is Trump Getting Rid of the EV Tax Credit?
The path President Donald Trump will take to eliminate the EV tax credit, as well as the fate of other EV-related clean air policies, is unclear at this time. It’s no secret that Trump is not a supporter of the EV tax credit, having spoken out against it and former President Joe Biden’s Inflation Reduction Act many times during the election campaign.
In an executive order issued shortly after taking office called “Unleashing American Energy,” Trump said his administration will work toward “the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor electric vehicles over other technologies and effectively force their purchase.” In this executive order, Trump also revoked Biden’s 2021 executive order decreeing that half of all new vehicles sold by 2030 should be electric vehicles.
However, Trump has not yet detailed a timeline or details related to these policy changes. Stay tuned for updates.
Related Post: Things You Need to Know Before Leasing a EV
How Do I Get the Tax Credit for New EVs?
Starting January 1, 2024, you have two ways to get the electric vehicle tax credit on a new vehicle purchase. Note that if you ordered a vehicle in 2023 but will receive it in 2024 or 2025, the new rules apply.
The new option starting in 2024 allows new car buyers to claim the full credit at the time of purchase. In IRS lingo, you “roll over” or transfer the credit to an IRS-registered dealer; the dealer then gives you that amount in cash or applies it to the cost of the vehicle.
A major advantage of that option is that as long as you meet income requirements — the latest IRS guidance says you can get the full credit on the purchase regardless of how much you owe in taxes. However, you still have to meet income limits; otherwise, you’ll have to pay the credit back to the IRS.
It’s still available (and the only option for those who bought electric vehicles in 2023) to claim the credit later with your tax return on IRS Form 8936. If you do, you can’t get a credit larger than the total tax bill you owe (in IRS lingo, the credit is “nonrefundable”). If the vehicle qualifies for a $7,500 credit but you only owe $4,000 in federal taxes for the year, you’ll “lose” the excess $3,500 you didn’t need.
How much do you need to earn to owe $7,500? For example, for tax year 2024, barring any tax law changes, to owe $7,500 you would need a taxable income (IRS Form 1040, line 15) of at least $55,400 as a single taxpayer, $62,700 for a head of household, and $66,150 for joint filers, according to the IRS Tax Table for 2024. But your situation and deductions could mean you would need a substantially higher income to owe $7,500.
Tax Credit for Used EVs
New for 2023 was a first-ever credit of up to $4,000 for buying a qualifying used EV from a dealer, and as of 2024, used-car buyers can choose to get the credit at the time of purchase. As with new vehicles, you “transfer” or sign over the credit to a registered dealer and the dealer will give you that amount in cash or apply it to the cost of the vehicle; you also get the full credit at purchase regardless of how much you’ll owe in taxes later. But if you exceed the income limits — which are lower for the used credit — you would have to pay back the credit to the IRS. If you claim the credit when you file your taxes (the only option for 2023 buyers), the credit is limited to what you owe in taxes.
The used-car credit is for up to $4,000 or 30% of the sale price, whichever is lower. Additionally, the used vehicle’s sale price must be $25,000 or less, and it must be at least two model years old. Additionally, the buyer’s adjusted gross income is limited to $75,000 for individuals, $150,000 for a joint return and $112,000 for heads of households.
Can I Lease a New EV and Get the Federal Credit?
Not directly. But leased electric vehicles qualify for a separate EV credit program that offers a $7,500 “trade credit” for light-duty vehicles purchased by businesses, including leasing companies.
The leasing company, which is the buyer of the vehicle, gets the credit and could then pass the value of the credit on to you in the form of a lower lease payment. That’s not required and you should make sure you get it, but many automakers are promoting it.
The main advantage of trade credit, called the “lease loophole” by critics, is that it has far fewer rules: Unlike purchase credit, there are no limits on the leasing customer’s income or the price of the vehicle.
The leasing customer can also choose from a wider selection of electric vehicles, since trade credit doesn’t have the complex battery rules or the requirement that the vehicle be manufactured in North America.
Jump To: Can You Lease an EV With Bad Credit?
How Many Credits Can I Get in a Year?
If you choose to transfer the credits to the dealer, you are limited to two credits per taxpayer per year. Under IRS rules, credits are issued in a single taxpayer’s name, even if the vehicle will be jointly titled, so spouses could transfer up to four credits per year.
Those transfers could include a credit per used vehicle, but the limits are stricter for used vehicles. Each taxpayer is limited to one credit for a used electric or plug-in hybrid vehicle in any three-year period.
Are There Other EV Tax Credits?
Many states and cities have their own tax incentives for new and even used electric and plug-in hybrid vehicles, and the Department of Energy has a state-by-state list here. Rules for vehicles and buyers vary, but many states have fewer restrictions than the federal program. Many also offer subsidies for home charging equipment.
