- The $7,500 federal tax credit for electric vehicles used to be one of the most significant incentives for buying an EV.
- The reason there are fewer cars on the list is that they now need to be manufactured in North America.
- The Ford E-Transit is a great option for a good battery life.
The $7,500 federal tax credit for electric vehicles used to be one of the most significant incentives for buying an EV. It allows you to get a rebate of up to $7,500 depending on the vehicle you chose, and the income that you make.
However, there’s been some debate about whether this incentive will remain the same in 2023. There has already been a massive cut down on the list of cars that qualify. This means that the number of new cars that qualify for the tax refund is currently only 12 EVs.
Fortunately, we’ve done our research on what EVs still qualify for the tax credit so that you can decide which one is right for your needs.
Why Are There Fewer Cars On The List than Before?
The reason there are fewer cars on the list is that they now need to be manufactured in North America. This means that car companies with factories in China, Germany, and other countries don’t qualify for this tax credit.
Since the new law passed, we have seen the removal of many manufacturers, like Toyota and some German manufacturers.
However, to compete with this, some car manufacturers are expanding their production facilities inside America so that they can return to the list soon.
The list of qualifying cars is constantly changing as manufacturers update their models and release new ones. When a car company has updated its vehicles to meet the requirements of the American-Made Tax Credit, it will be added to the eligible list for that year.
As of Monday, April 17th, 2023, new regulations have been implemented requiring a specific percentage of battery minerals and components to be sourced from North America or a U.S. trade partner. These rules were announced in the previous month as part of a major climate bill that restructured the tax credit for electric cars, with the aim of promoting U.S.-based production.
On Tuesday, the IRS published an updated list of vehicles that meet the new battery guidelines on FuelEconomy.gov, which went into effect on the same day. General Motors and other U.S. auto manufacturers are expected to benefit the most from the revised regulations.
While some popular models like the Tesla Model Y and Chevy Bolt remain eligible for the full $7,500 tax credit, starting from Tuesday, half a dozen models will receive a $3,750 credit instead, and other models including the VW ID.4, Nissan Leaf and Rivians will no longer be eligible for the credit.
While this list used to include more car types such as the Rivian series. The credit will no longer be available for the VW ID.4, Nissan Leaf, and Rivians vehicles.
Which EVs Still Qualify For The $7,500 Federal Tax Credit (Q4 2022)
Currently, the $7,500 tax credit is comprised of two distinct credits, each worth $3,750. At present, all eligible vehicles receive both credits, but this arrangement will change from April 18 onwards. After this date, vehicles may be eligible for one or both credits, or neither.
The IRS has identified the following vehicles that will remain eligible for both tax credits, totaling $7,500:
The Cadillac Lyriq is an SUV with a range of 312 miles, which means it is perfect for those who want to drive across the country in classic Cadillac style.
The starting price for this vehicle is $63,990. You can claim the full federal tax credit for this car, as long as you meet the other requirements.
Chevrolet Bolt EV
The Chevrolet Bolt EV is a mid-size electric car that has a range of 259 miles per charge and can go from 0 to 60 mph in 6.5 seconds. This performance is comparable to the Tesla Model 3, but costs $20,000+ less than Tesla’s entry-level model ($26,595 versus $46,990).
The Bolt EV has dual charging cables. It comes with a standard 120-volt charging cable and with a 240-volt charging cable.
The Chevy Volt EV is an affordable EV option with excellent range and performance specs that are comparable to its competitors.
Chevrolet will also come and install a level 2 charging station at your house for free, with every purchase of an EV.
Chevrolet Bolt EUV
The Chevrolet Bolt EUV is an enhancement of the Chevrolet EV. They have designed it for bigger families, in order to compete directly with the Tesla model 3. The differences between EUV and Tesla are minor, but if you’re buying Bolt EUV, you could save about $10,000.
The Chevrolet EUV (electric vehicle) has a 238-mile range and can go from 0 to 60 in 6.9 seconds. The EUV has a longer wheelbase, so it has more cabin space and room for luggage than the EV.
Ford F-150 Lightning
The Ford F-150 Lightning is a high-performance electric pickup truck you can charge in as little as 7 hours with a 120-volt charger. The Lightning has a range of 230 miles on a single charge, which makes it one of the longest-range electric trucks on the road today.
With a top speed of 111 mph and a 0 to 60 mph of just 3.8 seconds, it also has some pretty impressive numbers under its hood. All this mega truck for the price of $39,947 with the added benefit of a tax credit rebate.
Ford Mustang Mach-E
Whether you’re a fan of the Ford Mustang or not, you can’t deny that it’s one of the most popular cars in America. And if you are a fan and are looking for something new, then look no further than the Mach-E.
The Mach-E is easily one of the fastest Mustangs ever made. It can go 0 to 60 in just 3.5 seconds with a wheel horsepower output of 480. Which is about the same as its modern-day V8 models. The base mode has a decent range of up to 247 miles per charge, with the high-end models claiming 271 miles. All this for only $49,100.
While you may not get the full tax credit as with some other cars on this list, you may still receive the $3,750 tax credit.
If you’re looking for a full-size van that’s powered by an electric battery, the Ford E-Transit is a great option. It’s an all-electric vehicle, which has a maximum range of up to 126 miles on the battery. (Depending on how much weight you’ve loaded into it.)
The E-Transit offers seating for up to 15 passengers, along with ample storage space for luggage or equipment. There’s even an option for heated/cooled front seats for those chilly winter mornings.
The starting price is $43,295 for the base model, while it will cost up to $55,000 for the cargo van model. Both models fully qualify for the tax rebate.
Although you may not be eligible for the complete tax credit available for some other vehicles on the list, you may still be qualified to receive a tax credit of $3,750.
Tesla Model 3
The Tesla Model 3 is a luxury sedan that was introduced in July 2017. It’s available in three trims, the Standard, the Long Range, and the Performance models.
The full $7,500 tax credit will only apply to the standard base model Tesla 3. The Tesla 3 standard model has a starting price of $46,990.
Tesla Model Y
The Tesla Model Y is a mid-size SUV that was unveiled in March 2019. The Model Y has a range of 330 miles on a single charge and is expected to be priced at $64,990 for the base model and at $80,000 for the fully loaded long-range EV.
Ford Escape Plug-in Hybrid
The Ford Escape Plug-in Hybrid starts at $47,499 in certain areas and is eligible for the $3,750 tax credit. When fully charged, the vehicle can travel approximately 37 miles on pure electric power before transitioning to a standard gas-electric hybrid and achieving an estimated combined fuel efficiency of 40 mpg according to the EPA.
The vehicle comes equipped with a range of features designed to enhance driver comfort and convenience. The rear parking sensors provide added assistance when maneuvering in tight spaces, allowing you to park with ease and avoid any potential collisions.
Additionally, the intelligent adaptive cruise control system is equipped with stop-and-go functionality, lane-centering technology, and speed sign recognition capabilities. This suite of features can help to reduce driver fatigue, enhance safety, and provide a more relaxing driving experience overall.
Jeep Wrangler 4xe
The Wrangler 4xe boasts impressive performance capabilities both on and off the road. With 375 horsepower and 470 pound-feet of torque available instantly, this vehicle delivers a heart-pounding driving experience.
Thanks to the electric motor’s torque, the Wrangler 4xe is able to crawl over rocks with greater ease and accelerate powerfully from a standstill. Whether you’re tackling challenging terrain or cruising down the highway, the Wrangler 4xe is equipped to deliver a thrilling ride.
The 2023 Jeep Wrangler 4xe Rubicon costs $61,080 MSRP, while the 2023 Jeep Wrangler 4xe High Altitude costs $63,115 MSRP. It is eligible for the $3,750 tax credit
Lincoln Corsair Grand Touring Plug-in hybrid
The 2023 Lincoln Corsair 4dr SUV (2.0L 4cyl Turbo 8A) is the most affordable option, with a starting price of approximately $38,690, including the destination charge. There are other versions of the vehicle, such as the 4dr SUV (2.0L 4cyl Turbo 8A), also starting at $38,690. Additionally, this model is qualified for the $3,750 tax credit.
Summary of The Vehicles That Are Still Eligible for the $7,500 Tax Credit
|Chevy Silverado EV
|Chevy Bolt EUV
|Chrysler Pacifica PHEV
|Ford F-150 Lightning
|Lincoln Aviator Grand Touring plug-in hybrid
|Tesla Model Y (AWD, Long Range AWD, and 2022 Performance)
|Tesla Model 3 (Performance)
Summary of The Vehicles That Are Only Eligible for the $3,750 Tax Credit
|Ford Escape plug-in hybrid
|Jeep Wrangler 4xe
|Jeep Grand Cherokee 4xe
|Lincoln Corsair Grand Touring plug-in hybrid
|Tesla Model 3 (Standard Range RWD)
Summary of Vehicles that Used to Quality but No Longer Do
|Audi Q5 TFSI e Quattro
|BMW X5 xDrive45e
|Genesis Electrified GV70
|Nissan Leaf S, S Plus, SL Plus, SV and SV Plus
|Volkswagen ID.4 (VW had expected to qualify for at least one credit)
|Volvo S60 (PHEV), Extended Range, and T8 Recharge (Extended Range)
What’s Required To Qualify For The $7,500 Federal Tax Credit?
To receive the credit, you must buy your EV from a manufacturer that has built the car on U.S. soil and one that has not received over 200,000 claims. For an EV, it has to be valued under $55,000 or $80,000 for trucks and SUVs.
The only other requirement is that your annual income must be less than $300,000 for a family or $150,000 per individual.
As of 2023, here are some guidelines to qualify:
- The vehicle must have a minimum battery capacity of 7-kilowatt hours.
- The gross vehicle weight rating should be less than 14,000 pounds.
- The car must be manufactured by a qualified manufacturer.
- The final assembly of the vehicle should take place in North America.
- The vehicle must meet the critical mineral and battery component requirements as of April 18, 2023.
Are There Other EV Credits?
As you can see, the new federal tax credit of $4,000 for used EVs is not as generous as the previous $7,500. However, there are some benefits to this new program:
- You might pay less money than you would have on a newer car. Depreciation means you will save significantly because used EVs cost significantly less than their newer counterparts. This makes them an attractive option if you want to save some cash while still enjoying all that green driving offers.
- The credit is easily accessible for cheaper EVs.
- The car has to be at least two model years old or older at the time of sale.
- And it has to be priced under $25,000.
Read our full comprehensive blog here about The $4,000 Used EV Tax Credit Explained, and How to Get it.
As you can see, there are still many options to choose from! There are so many great EVs out there that will get you the best bang for your buck.
However, if you’re looking for something that is affordable and will save money, we recommend picking the Chevrolet BOLT EUV; I believe this is the best value-for-money EV in the states, because of its affordable price, competitive features, and the $7,500 tax credit that you can claim.
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