Electric vehicles that qualify for $7,500 tax credit
April 17, 2023
General Motors, Ford, Stellantis and Tesla are the only four automakers with electric vehicles that qualify for $7,500 in tax credits this year, according to rules released by the U.S. Treasury Department on Monday.
The new tax credits, which last until 2032, were enacted last year in the Inflation Reduction Act and are designed to encourage more Americans to buy eco-friendly vehicles. Some gas-electric hybrid vehicles will be eligible for half the tax credit — or $3,750 — while drivers who purchase certain pre-owned electric vehicles this year can get a $4,000 credit.
The following electric vehicles qualify for the full $7,500 federal tax credit:
Chevrolet Bolt & Bolt EUV
Ford F-150 Lightning (both standard and extended range battery)
Tesla Model 3
Tesla Model Y (both all-wheel and long range drives)
“The great news here is that based on [first-quarter 2023] sales volumes, more than 90% of vehicles that were eligible for the credit before April 18 are still eligible, with the vast majority eligible for the full credit,” Albert Gore, executive director of the Zero Emission Transportation Association, a clean-vehicle industry group based in Washington, D.C., said in a statement.
Customers who purchase those cars can have the tax credit applied to their 2023 return. Starting next year, drivers can transfer the credit to a dealership, thus lowering the vehicle purchase price. Drivers are eligible for the tax credit as long as the EV’s sticker price is less than $55,000 for sedans and no more than $80,000 for SUVs and vans.
Growing demand for EVs
The new guidance arrives amid growing demand for EVs. The average new EV sold for $58,940 last month, up from $58,385 in February, according to Kelley Blue Book. Automotive experts say it’s important to watch the affordability of electric vehicles as the U.S. tries to loosen its dependency on fossil fuels.
The Biden administration has said it also wants to reduce the nation’s dependency on foreign-sourced materials for electric vehicle batteries.
The new list means vehicles from Hyundai and Nissan — all of which make EVs — are no longer eligible for the tax credit. Many vehicles fell off the list because federal guidelines now require that eligible vehicles must be built in North America.
Hyundai told Reuters in a statement Monday that it “will utilize key provisions in the Inflation Reduction Act to accelerate the transition to electrification.” Nissan told the news service that it’s “working closely with our suppliers and are hopeful that Leaf will qualify for at least partial credit in the future.”
These EVs and hybrids are no longer eligible for the government tax credit.
Nissan Leaf models — including the S, S Plus, SL Plus, SV and SV Plus
Volvo S60 models — including the Extended Range and T8 Recharge
Audi Q5 TFSI e Quattro
Ford Escape Plug-In
Lincoln Aviator Grand Touring
Volkswagen ID.4 models — including the Pro, Pro S, S, AWD Pro and AWD Pro S
Four hybrid vehicles and three EVs — the Ford Escape, Jeep Grand Cherokee, Jeep Wrangler, Lincoln Corsair Grand Touring, Ford E-Transit, Mustang Mach-E and Tesla Model 3 Standard Range — are eligible for the partial tax credit. For a full list of eligible vehicles, visit fueleconomy.gov.
Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.