Federal clean vehicle (EV) tax credits are still alive as the new year begins, but the list of eligible new vehicles is shorter than it was just a few months ago.
And there’s no telling how long the tax credits for electric vehicles will last. The president-elect’s personal budget cutting advisor, Elon Musk, he of Tesla renown, has recommended eliminating the program that was instituted by Congress two years ago as part of the Inflation Reduction Act, or IRA.
Because the program is part of an actual law, it doesn’t seem likely that a president, even one with a dictatorial bent, could cancel it – but Republicans have slight majorities in both houses of Congress this year and the GOP seems wont to bend to the Trumpian will more often than not.
But until, or unless, there’s a successful move to eliminate that part of the IRA, there still are a few EVs and plug-in hybrids that meet all of the law’s strict made-or-sourced in North America requirement and qualify for a tax credit for buyers. Usually it will be either $7,500 or $3,750 (this time around all are for the full $7,500). The eligibility list changes regularly as automakers bring out new models and adjust their manufacturing and supply chains to meet the IRA’s requirements.
[All the rules, including those for used EVS]
U.S.-built versions of Volkswagen’s ID.4, for instance, had been eligible last year but VW’s electric SUV isn’t on the January 2025 list because it no longer meets the battery minerals sourcing requirement.
Also gone are Rivian’s electric pickups and SUVs and the Nissan Leaf EV. Among PHEVs, the Audi Q5, Ford Escape, Jeep Grand Cherokee and Wrangler, and Lincoln Corsair plug-in-hybrids all lost eligibility.
The Rules, in Brief
As we’ve explained before, an IRA ruling has held †hat leased vehicles are exempted from those requirements because they are classed as commercial, so most EVs and PHEVs are eligible for the credit, which is passed on to the actual owner – the leasing entity – who may then opt to pass it through to the customer. Most automakers’ leasing arms are doing just that, but we suggest you check before signing on the dotted line if the deal hinges on the incentive.
For buyers, the law made it possible to apply the tax credit directly against the purchase price at the time of sale if it is a sale via a dealership. There is paperwork to fill out and the dealer has to be registered to participate, so ask first. But in almost all cases when a new vehicle is eligible, the credit can be applied to help lower the out-of-pocket cost of the down payment (or to increase the down payment to make monthlies lower, or, for cash buyers, to effectively reduce the cost of the vehicle.
In addition to restricting where the vehicle, batteries and battery chemicals can come from, the law sets (adjusted gross) income caps for buyers: $300,000 for married couples filing jointly, $225,000 for a head of household filer, and $150,000 for all other filers. It also caps the MSRP (manufacturer’s suggested retail price): $80,000 for trucks, vans and SUVs, $55,000 for cars. That means that not all versions of a particular model are necessarily eligible. As of this month, there are 15 models from eight brands. There’s only one passenger car, the Tesla Model 3, and one plug-in-hybrid, the Chrysler Pacifica Hybrid minivan.
Eligible Clean Vehicles
Without further ado, the list of eligibles (and we will post updates as models are added of removed during the year), the eligible model years and the tax credit amounts. Remember, pickups and SUVs lose eligibility if their MSRPs exceed $80,000; cars – in this case the Tesla Model 3 versions – lose it past $55,000.
Acura ZDX SUV, 2024-25, $7,500
Cadillac Lyriq SUV, 2024-25, $7,500
Cadilllac Optiq SUV, 2025, $7,500
Chevrolet Blazer EV SUV (LT, RS & SS trims), 2024-25, $7,500
Chevrolet Equinox EV SUV (LT & RS trims), 2024-25, $7,500
Chevrolet Silverado EV pickup (LT trim), 2025, $7,500
Chrysler Pacifica Hybrid PHEV minivan, 2024-25, $7,500
Ford F-150 Lightning pickup (Lariat & XLT trims), 2-023-25, $7,500
Ford F-150 Lightning pickup (Flash trim), 2024-25, $7,500
Honda Prologue SUV, 2024-2025, $7,500
Kia EV6 SUV, 2025, $7,500
Kia EV9 SUV, 2026, $7,500
Tesla Cybertruck pickup (single and dual motor variants), 2025, $7,500
Tesla Model 3 (Performance trim & Long Range rear- and all-wheel drive versions), 2025, $7,500
Tesla Model Y SUV (Performance trim & Long Range rear- and all-wheel drive versions), 2025, $7,500
Tesla Model X SUV, (all-wheel drive ), 2025, $7,500.