If you want to drive an electric vehicle, you’ll also want to qualify for the federal EV tax credit. This is a great way to save money for the new-fangled, futuristic electric car you’re driving. The recent changes made by the Inflation Reduction Act of 2022 added stricter EV requirements. These changes mean that some electric vehicles don’t qualify for EV tax credits.
Before we offer the list of qualifying EVs, let’s explore some new rules and regulations.
Are there supply and production requirements for electric vehicles?
Yes, in an effort to create more North American production of new electric cars, some of the regulations require vehicles to be built and supplied locally to qualify for the federal EV tax credit.
Here are some of the highlights of these requirements:
- The final assembly of electric vehicles must occur in North America (Canada, Mexico, United States)
- The maximum credit is still $7,500 but is split in half based on new criteria.
- Critical battery minerals – A specified percentage mined or recycled in the US or a country with a free trade agreement with the US.
- Battery components – A specified percentage of components must be manufactured and assembled in the US.
- Blacklisted countries cannot be involved in supplying batteries, components, or minerals (China, Russia, Iran, North Korea)
Do vehicle price and household income determine the new federal EV tax credits?
Both vehicle price and household income are considered when determining qualifications for the federal EV tax credit under the new Inflation Reduction Act.
The price limits for new EVs are:
- SUVs, vans, and pickup trucks – less than $80,000
- Other EVs – less than $55,000
The income limits for qualifying buyers are:
- Joint filers – not to exceed $300,000
- Head of household – not to exceed $225,000
- Individual or another filing status – not to exceed $150,000
Are there any federal EV tax credits for used electric vehicles?
Yes, Forbes gives us a summary of the Inflation Reduction Act, which spells out specific requirements for used EVs and how they qualify for credit. With more electric vehicles heading to the market over the next few years, this is an important way to offer savings to shoppers buying electric cars on this secondary market.
What current electric vehicles qualify for the federal EV tax credit?
This list of vehicles should meet the qualifications to receive some portion of the tax credit. These vehicles are either already being assembled in North America or will be soon. The guidelines change for each calendar year, and these models qualify for the remainder of 2022. Things could change for next year.
The EVs that currently qualify for the tax credit are:
|Audi Q5 PHEV||Audi Q5 PHEV|
|BMW 3 Series PHEV||BMW 3 Series PHEV|
|BMW X5 PHEV||BMW X5 PHEV|
|Chrysler Pacifica PHEV||Mercedes-Benz EQS SUV|
|Ford Escape PHEV||Nissan Leaf|
|Ford F-150 Lightning||Volkswagen ID.4|
|Ford Mustang Mach-E||Volvo S60 PHEV|
|Ford E-Transit Cargo Van|
|Jeep Grand Cherokee 4xe|
|Jeep Wrangler 4xe|
|Lincoln Aviator PHEV|
|Lincoln Corsair PHEV|
|Tesla Model 3|
|Tesla Model Y|
|Volvo S60 PHEV|
Some models may exceed the price limitations.
Is the list of qualifying electric vehicles fluid?
Yes, some automakers are moving production of their EVs to North America to meet the requirements for the tax credit. Additionally, the percentage of components and materials that must be locally sourced increases annually under the Inflation Reduction Act.