The Clean Vehicle Tax Credit provides up to $7,500 to reduce the selling price of an electric vehicle, and the availability of the incentive continues to improve as more vehicle models become available. electrical systems meet complex eligibility criteria. A simplified cash deposit procedure also increased the appeal of the incentive, allowing consumers to lower the sales price at the time of EV purchase instead of making them wait until the following tax season to apply. credit. . The incentive was a major climate provision of the Inflation Reduction Act (IRA) and will remain available until the end of 2032, with even more electric vehicle models becoming eligible in the coming years.
Electric vehicles currently eligible for the credit are listed on the Environmental Protection Agency’s fueleconomy.gov website, and the list has grown significantly since the IRA was passed in August 2022. The complex tax law disqualified all new electric vehicles assembled outside the North. America and implemented strict new requirements for the supply of battery materials. Electric vehicle advocates were discouraged by the small selection of models initially eligible for the credit, but many applauded efforts to build domestic electric vehicle manufacturing capacity. The list of eligible electric vehicles now includes a fairly broad assortment of models, and the addition of a smaller tax credit for used electric vehicles has provided new options for green consumers on tighter budgets.
It is particularly helpful that Tesla has now qualified ten of its exceptional models for this credit. Tesla manufactures about half of all electric vehicles sold in the United States, dominating the market segment with cutting-edge electric vehicles and an extensive, reliable charging network. Tesla’s qualified electric vehicles currently include four variants of its most affordable model, the Model 3, five variants of its popular Model Y, and a single variant of the Model such that some models are only eligible for half. -$3,750 credit, but Tesla’s ten is eligible for the full $7,500 incentive. The 2024 rear-wheel-drive Model 3 is the most efficient vehicle on the EPA’s list, with a combined MPGe rating of 132.
Fully electric pickup trucks and SUVs are now well represented on the list. The pickups include two variants of Ford’s F-150 Lightning and seven variants of Rivian’s R1T. Eligible SUVs include eight variants of Volkswagen’s ID.4, Acura’s ZDX, Cadillac’s Lyriq, Chevrolet’s Blazer and Equinox, Honda’s Prologue and five variants of Rivian’s R1S. Tesla’s Model X and Model Y are also classified as SUVs. For these larger vehicles to qualify, the MSRP must not exceed $80,000, and the price cap will disqualify some fully equipped models. All are eligible for the full $7,500 credit, except Rivian models, which are only eligible for the $3,750 half credit.
Consumers looking to apply the full credit to smaller, more affordable electric vehicles have fewer options. In addition to Tesla’s Model 3 variants, the list includes the Chevrolet Bolt and Bolt EUV, both of which have been temporarily discontinued. Two variants of the Nissan Leaf are eligible for half credit. Used electric vehicles offer many more options and are subject to a price cap of $25,000. The credit will reduce the sale price by 30%, but will cap at $4,000.
The clean vehicle tax credit had a rocky start, but those days are over. If you want to pocket the savings, the selection of qualified electric vehicles has never looked better.
