Check Out an Updated List of Vehicles Eligible for the EV Tax Credit

It's no secret that electric vehicles (EVs) can be quite expensive. That's mainly because high-voltage batteries are pricey and partly due to the fact that automakers must come up with new platforms, production lines, and software.

Lawmakers decided to help automakers sell more EVs by implementing the EV tax credit. The original initiative was good because not only did it spur the accelerated growth of the EV movement, but it also convinced more Americans to consider owning a so-called "clean" car.

At the same time, it should have theoretically supported some climate goals because personal mobility is a major part of road transport pollution. It could have also helped the US become less reliant on fossil fuels, which are priced based on what other countries decide to do.

However, it didn't work out very well. For example, previous rules stated that once a brand sold 200,000 EVs, the value of the federal perk would drop by 50%. That wasn't very helpful. Fewer new EVs on the road weren't going to lower the amount of greenhouse gas emissions by a considerable amount.

Important changes to keep in mind

Fortunately, the new EV tax credit changed the rules of the game. The Inflation Reduction Act (IRA) implemented a plethora of new regulations that not only eliminated that sales numbers restriction but also added enough limitations to support the domestic automotive industry.

For example, starting next year, EVs that want to be eligible for the federal perk must have their batteries made of at least 50% critical minerals extracted or processed in the US or in a country with which the US has a free-trade agreement signed. As you may already expect, that automatically excludes China, which just so happens to have six of the world's top 10 EV battery manufacturers.

The critical mineral percentage requirement is only going to grow from here on out on a yearly basis until 2027. That's when eligible EVs will have to come with high-voltage energy storage units that contain at least 80% critical minerals that were mined and processed in the US or in countries with which America has that much-needed free-trade agreement.

But that's not all! Putting those minerals into cells and turning them into battery packs must also happen in North America. For 2023, it's enough to have half of the high-voltage energy storage unit manufactured or assembled in the US, Canada, or Mexico. From 2024 onwards, that percentage will grow by 10% yearly until 2028, when EV batteries must be completely made in one of the three aforementioned countries.

The IRA also introduced price limits: $55,000 for cars (i.e., sedans or wagons) and $80,000 for SUVs, pickup trucks, and vans.

On top of all that, prospective EV buyers must qualify for the EV tax credit. They have to earn a maximum of $150,000 as single filers, $225,000 as heads of households, and $300,000 as married couples who file their taxes jointly. All those figures refer to the yearly gross income.

Starting next year, buyers can get the EV tax credit at the point of sale with the dealership's help (that includes direct sellers like Tesla or Rivian). That speeds up the process considerably because you won't have to wait until next year to get the fiscal advantage. But be aware of the implications and check if you meet all the criteria. Otherwise, you might learn in 2025 that you owe more money to the Internal Revenue Service.

Now that we got all that out of the way, let's look at the recently refreshed list of vehicles eligible for the EV tax credit.

Do note that what you're going to see below might change in January 2024 because of the new rules that will enter into effect. Thus, if you consider buying an EV this year, it's better to make your move before 2023 ends.

All the EVs that qualify for the Clean Vehicle Tax Credit (aka the revamped EV tax credit)

Cadillac makes the Lyriq and the Celestiq, but only the former is eligible for the $7,500.

Chevrolet does it better than Caddy. It has five units that qualify for the full tax credit: the Blazer EV, the Bolt, the Bolt EUV, the Equinox, and the Silverado. But be advised: the two Bolts are in production until the end of the year because they will be replaced in 2024, the Silverado EV is hard to find, the Equinox EV is almost nowhere, and the Blazer EV is just now reaching dealerships.

Ford has three all-electric units that are eligible for the EV tax credit, but here's the amount each can get:

• $7,500 for the F-150 Lightning (both the Standard and Extended Range);
• $3,750 for the Mustang Mach-E (both the Standard and Extended Range);
• $3,750 for the E-Transit van.

The Nissan Leaf S and Leaf SV Plus also qualify for the federal perk, but both get just $3,750.

The same amount is available for Rivian's R1T and R1S, but the only one available when writing is the dual-motor R1T. The SUV costs less than $80,000 only when it's paired with the standard battery pack, which is the smallest energy storage unit the automaker plans on offering in mid-2024.

As we reported in September, Tesla made all its EVs eligible for the full EV tax credit except for the Model S.

VW's ID.4, available in eight trims (Standard, S, Pro, Pro S, Pro S Plus, Pro AWD, Pro S AWD, and Pro S Plus AWD), can also get the $7,500.

The new EV tax credit can also be applied for the following plug-in hybrid (PHEVs):

• 2023 Ford Escape ($3,750);
• 2023 Lincoln Aviator Grand Touring ($7,500);
• 2023 Lincoln Corsair Grand Touring ($3,750);
• 2024 Jeep Grand Cherokee ($3,750);
• 2024 Jeep Wrangler 4xe ($3,750);
• 2024 BMW X5 xDrive50e ($3,750);
• 2024 Chrysler Pacifica PHEV ($7,500).

Finally, all the above data is according to the Internal Revenue Service's latest information, which has also been verified by the Environmental Protection Agency (EPA).