ORLANDO, Fla. – If you’ve been on the fence about buying an electric vehicle, you’ve got just days left to close the deal and potentially save thousands of dollars.
The federal government’s clean vehicle tax credit, which has been helping drivers shave up to $7,500 off the cost of a new EV (or up to $4,000 on qualifying used models), is set to expire on Tuesday, Sept. 30.
That means shoppers for electric vehicles (and some plug-ins) have until then to sign a binding purchase agreement and make a payment to lock in their savings. Even if the car won’t be delivered until later, what matters most is getting the paperwork stamped before the deadline.
Under the Inflation Reduction Act, the EV tax credits originally weren’t supposed to end until 2032.
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However, President Trump’s recent policy direction and Congress’ passing of the One Big Beautiful Bill Act (Public Law 119-21) fast-tracked the phase-out, effectively pulling the plug seven years early.
Industry analysts warn that the Trump administration’s action will cool EV adoption across the U.S., especially since federal credits have helped reduce the upfront sticker shock for first-time buyers.
And while some state and local rebates may survive, Floridians are pretty much out of luck on offers (though we did find a $200 rebate from OUC on EV leases or purchases and a $100 rebate after the installation of a Level 2 charger for Kissimmee Utility Authority customers).
So, what vehicles are eligible? And is everyone eligible? Those answers require a little bit of deep dive:
First things first: on a new EV, even though you can get up to $7,500 off the purchase price, what you’re really getting is two tax credits of $3,750.
- One of the $3,750 tax credits specifically corresponds to where a vehicle’s critical minerals are sourced. What is a critical mineral – think of natural resources like lithium, cobalt, nickel, manganese, and graphite. To qualify for the full $3,750, a certain percentage of those materials must come from the U.S. or a free trade partner…
- The second $3,750 tax credit is tied to battery components and where they are manufactured or assembled. Battery components can include cathodes, anodes, electrolytes, separators, battery cells, and battery modules…
Next, even if your vehicle has the right mix of critical minerals and battery components, there are still a few boxes that need to be checked, including some about the buyer:
- Battery Size: The EV must have a battery capacity of at least 7 kilowatt-hours (kWh)…
- Assembly Location: The vehicle must be “final-assembled” in the U.S., Canada, or Mexico…
- MSRP Price Caps: Sedans, hatchbacks, wagons must have an MSRP of less than $55,000. SUVs, pickup trucks, and vans have to be under $80,000…
- Buyers: If you are a single tax filer, your MAGI (modified adjusted gross income) needs to be less than $150,000. Head of household MAGI limits need to be under $225,000, and married couples filing jointly need to be under $300,000…
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Before I get to the list of vehicles that qualify for full or partial tax credits, there’s one really important (and good) thing to know about the actual tax credit itself: the tax credit is instant and comes right off the price of the vehicle at the point of sale as long as the dealer is IRS-registered.
That means you don’t have to wait until tax season to take advantage of this EV credit, but it also means if you’re purchasing an EV in a private, non-dealership sale, the IRS says you do not have access to the federal EV credits. And one final note on the dealership thing: the IRS put that in place to ensure proper reporting and curtail fraud (like people trying to claim the same car multiple times).
OK- now that all of that is out of the way, here is a list of new vehicles that qualify for federal EV tax credits if you make the purchase from a dealership and if the purchase is completed by Sept. 30:
New vehicles that qualify for EV credits:
- Acura ZDX (some trims)
- Cadillac Lyriq and Optiq
- Chevrolet Blazer EV, Equinox EV, Silverado EV
- Ford F-150 Lightning (many trims)
- Honda Prologue
- Hyundai Ioniq 5
- Kia EV6 and EV9
- Tesla Model 3, Model Y, Model X and Cybertruck (selected trims)
OK- new vehicles – done. What about used ones? Used EV buyers aren’t shut out, but the rules are stricter and a bit different:
- As previously mentioned, the used EV credit is only worth up to 30% of the price of the vehicle and cannot exceed $4,000 (significantly less than the $7,500 cap on new EVs)…
- The price of the used EV cannot exceed $25,000…
- Like new EVs, the purchase must be made from a licensed IRS-registered dealership…
- The model year of the used EV must be at least two years older than the current model year (in other words, 2024 EVs don’t qualify, but anything older than 2023 would if other requirements are met)…
- Like new EVs, the battery size must be at least 7 kilowatt-hours...
- Buyers can’t claim this credit if they’ve already taken advantage of it within the past three years…
Used Vehicles that qualify for EV credits:
- Ford Escape Plug-in Hybrid
- Jeep Wrangler 4xe and Grand Cherokee 4xe
- Lincoln Corsair Grand Touring
- Nissan Leaf S & SV
- Rivian R1T and R1S (various dual motor or large pack trims)
For the most up-to-date information, follow this link to the IRS website for EV tax credit information. Eligibility is subject to change, so check the IRS website for the most up-to-date lists.
The bottom line: after Sept. 30, federal incentives vanish and the cost of going electric will rise.