If you’ve been thinking of buying a new hybrid or electric car, truck or van, you’ll be happy to see that the federal government has published updated rules for tax credits on electric vehicles.
Under those rules, you could be eligible for a tax credit of up to $7,500.
Following are the basics for getting the credit, then a list of the vehicles eligible for the maximum amount.
Credit eligibility
These new credit rules are for purchasing a new “clean” vehicle that you’ve taken possession of on or after April 18, 2023. The credits apply to vehicles that will be used (and not resold) in the United States by the person or business receiving the credit.
The vehicle must meet certain “critical” mineral and battery component requirements and must be assembled in North America. The manufacturer suggested retail price (MSRP) can’t be more than:
- $80,000 for sport utility vehicles, pickups and vans
- $55,000 for other vehicles
Also, there are income limits for those claiming the credit. Your modified adjusted gross income can’t be more than:
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
If you and the vehicle are eligible, you may be able to receive as much as $7,500 toward the purchase. Keep in mind that the money is in the form of a tax credit, and so you won’t receive more than you owe in federal income tax — up to a maximum of $7,500.
1. Cadillac Lyriq
Model years of this vehicle eligible for the full credit amount: 2023-2024
The 2024 Lyriq is an all-electric SUV, and so could qualify for the up-to-$80,000 price tag allowed for sport utility vehicles purchased under the tax credit program.
For the adventurous, Cadillac offers a hands-free “super cruise” driver assist option.
2. Chevrolet Blazer
Model year of this vehicle eligible for the full credit amount: 2024
Chevy’s 2024 Blazer starts at a relatively affordable $35,400 MSRP.
Remote starting, wireless charging and “adaptive” cruise control are among the offerings. The Blazer has a Wi-Fi hotspot capable of serving up to seven devices. It also has voice control and a 64.2-cubic-foot cargo area.
3. Chevrolet Bolt (and Bolt EUV)
Model years of this vehicle eligible for the full credit amount: 2022-2023
Car & Driver calls the Bolt EUV (electric utility vehicle) “roomy for its size.”
What’s the difference between the Bolt EV and the Bolt EUV? For one thing, says the magazine:
“The 2023 Chevrolet Bolt EUV takes the regular Bolt EV hatchback’s underpinnings and tops them with sheetmetal that makes it look much more like an SUV — which, of course, is the body style American buyers vastly prefer.”
4. Chevrolet Equinox
Model years of this vehicle eligible for the full credit amount: 2024
The 2024 Equinox EV’s very reasonable starting MSRP is $26,600.
The Equinox offers automated safety features such as front pedestrian braking, “lane keep assist” and, to discourage dangerous tailgating, a following distance indicator.
The automaker adds, however: “Due to current supply-chain shortages, certain features shown have limited or late availability, or are no longer available.”
5. Chevrolet Silverado
Model years of this vehicle eligible for the full credit amount: 2024
MotorTrend reviewed the full-size Chevy Silverado EV truck, calling it “a no-frills, all-electric everyday work buddy.”
Chevrolet lists the rock-bottom MSRP for the truck at $36,800.
6. Chrysler Pacifica
Model years of this vehicle eligible for the full credit amount: 2022-2024
Chrysler covers all the bases with its Pacifica PHEV. It calls the vehicle “America’s first and only plug-in hybrid minivan.”
MSRPs for models of the Pacifica PHEV begin at $51,095.
7. Ford F-150 Lightning
Model years of this vehicle eligible for the full credit amount: 2022-2023
Ford’s F-150 Lightning with either the standard or extended-range battery is eligible for the tax credit.
The lineup of four Lightning models have starting MSRPs ranging from $49,995 to $91,995.
8. Ford Mustang Mach-E
Model years of this vehicle eligible for the full credit amount: 2022-2023
Car and Driver handed the 2023 Mustang Mach-E nine of 10 possible points in its car test and also gave it an editor’s choice award. And yet, “it isn’t as exciting as America’s first pony car,” reviewer Andi Hedrik writes.
The Ford Mustang Mach-E with standard battery and extended-range battery are both eligible for the federal tax credit. The Mach-E starting MSRP is $44,795.
9. Lincoln Aviator Grand Touring
Model years of this vehicle eligible for the full credit amount: 2022-2023
Edmunds rates the 2023 Aviator Grand Touring a 7.7 on a 10-point scale.
The Aviator Grand Touring has an available plug-in hybrid powertrain and will go about 21 miles on all-electric power before switching to regular hybrid operation.
10. Tesla Model 3
Model years of this vehicle eligible for the full credit amount: Eligible years vary (see below)
The 2022 and 2023 model years of Tesla’s Model 3 Performance and Model 3 Standard Range Rear Wheel Drive are eligible for the federal tax credit, according to FuelEconomy.gov.
Only the 2023 model year of the Model 3 Long Range All-Wheel Drive is eligible.
The Model 3 has an estimated range of 272 miles and a top speed of 140 miles per hour, Tesla says.
11. Tesla Model Y
Model years of this vehicle eligible for the full credit amount: 2022-2023
The fully electric Model Y has 76 cubic feet of cargo space and an estimated range of 330 miles, the electric car maker says.
Tesla Model Y vehicles eligible for the federal tax credit include: Model Y All-Wheel Drive, Model Y Long Range All-Wheel Drive and Model Y Performance.
Tesla lists the Model Y MSRP as $40,240 after tax credit savings.
12. Volkswagen ID.4
Model years of this vehicle eligible for the full credit amount: 2023
Volkswagen scores with eight ID.4 2023 models that are eligible for the IRS credit program. These are:
- Volkswagen ID.4 AWD (All-Wheel Drive) Pro
- Volkswagen ID.4 AWD Pro S
- Volkswagen ID.4 AWD Pro S PLUS
- Volkswagen ID.4 Pro
- Volkswagen ID.4 Pro S
- Volkswagen ID.4 Pro S Plus
- Volkswagen ID.4 S
- Volkswagen ID.4 Standard
Plus, hold onto your hat! Drivers nostalgic for the old VW van may be glad to learn that, in 2024, the automaker is launching its new VW ID Buzz, an electric version of the old favorite. At this point, it is not on the list of 2024 credit-eligible models. Maybe that will change.
More details and other vehicles
Although we looked only at vehicles that qualify for the full tax credit, it’s worth knowing that some vehicles qualify for a partial credit of $3,750. You can get the full list of eligible vehicles by going to FuelEconomy.gov.
For more details about vehicle and buyer eligibility, see the IRS’ Credits for New Clean Vehicles Purchased in 2023 or After. Also, this IRS fact sheet has frequently asked questions about the program.
One more bit of good news: In 2024, qualifying taxpayers will be able to transfer their EV tax credit to a dealer as they make a purchase, using it as a down payment immediately instead of waiting until tax season. The IRS has the basics now, with more information to come down the road.
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