All The Vehicles Eligible For The Federal EV Tax Credit As Of July 2024

If you’ve considered purchasing an electric car in the past few years, you’ve undoubtedly heard about the federal EV Tax Credit. This credit, which technically goes back to 2009 and the Obama administration, was created to help facilitate the transition to electric vehicles by bringing down the price of the vehicle with a credit that could be applied at the end of the year on the customer’s taxes. The law has changed substantially, most significantly with the passing of the 2022 Inflation Reduction Act (IRA). However, today, significantly fewer vehicles qualify for the $7,500 tax credit compared to just a few years ago.



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Even compared to January 1st, 2024, the vehicles that qualify have changed, and we get the feeling this is only going to be par for the course moving forward as automakers react to rules that are only going to get more stringent year after year. We wanted to discuss how the tax credit has changed this year and then take a look at the vehicles that qualify as of July 1st, 2024. We’re then going to look toward the future to see what we can expect from the tax credit moving forward.


How The EV Tax Credit Works In 2024

rivian r1t front quarter blue
Rivian


The tax credit saw a few major changes for 2024 that not only saw it get much stricter but also more useful to the consumer. First, the good, if you weren’t aware, you can now take the $7,500 EV tax credit at the point of sale by transferring the tax credit to the dealer. In the past, given this is a tax credit, you would only receive the benefit when paying your taxes at the end of the year, meaning you had to pay full price for the vehicle when purchasing it.

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If you’ve looked at a Tesla Model 3 or a Hyundai Ioniq 5, you’ve probably seen the automakers reflect this discount in the price, and this is very substantial, depending on the vehicle. There are caveats, though, to qualifying, with the vehicle not able to eclipse a certain MSRP and gross income requirements for buyers. First, the vehicle must at least have a 7 kWh battery or larger, so mild hybrids are out. The MSRP of an SUV cannot exceed $80,000, and for all others (cars, hatchbacks, etc.) the price cannot exceed $55,000. According to the IRS, the MSRP, in this case, “includes any trim, options, or accessories for the particular vehicle and excludes the destination fee and dealer-provided options and accessories.” This is why the Tesla Model 3 performance no longer qualifies if you opt to have it painted Ultra Red.


On top of this, there are thresholds for modified adjusted gross income:

  • $300,000 for joint filers
  • $225,000 for head-of-household filers
  • $150,000 for all other filers

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The Rules Are Getting More Stringent

2024 Acura ZDX Front Quarter
Acura

As of August 17, 2022, a vehicle has to have a final assembly in North America to qualify for the credit, which is a pretty straightforward requirement, but where issues have arisen from 2023 to 2024 is the increase in the critical minerals and battery components that can no longer be sourced from a “foreign entity of concern” (FEOC) which includes Russia, North Korea, Iran, and China.


China essentially has a monopoly on many of the materials and contents needed for these vehicles, so practically every automaker needs to source from it because the supply chains don’t exist in other parts of the world. As the percentages have gone up this year, many automakers weren’t able to cope on time, thus we saw the number of vehicles that qualified in February fall to a mere 5.

Year

Critical Minerals Percentage

Battery Components Percentage

2024

50%

60%

2025

60%

60%

2026

70%

70%

2027

80%

80%

2028

80%

90%

2029 and beyond

80%

100%


Technically, the $7,500 EV tax credit is split up into two parts: $3,750 for qualifying for the critical minerals percentage and $3,750 for qualifying for the battery components percentage. According to the chart below, the amounts are set to rise every year.

As can be expected, there has been a ton of pushback from the automotive industry on these rules, and some leeway has been given, like the extension of small amounts of graphite being exempt from the ruling until 2027. Unfortunately, the only real solution is complying with them, and the list below indicates automakers are willing to find a way to comply, as it now comprises

Qualifying Cars

2024-cadillac-lyriq-004
Cadillac


The US Department Of Energy consistently keeps a list of all the EVs and PHEVs that qualify for either a full or partial ($3,750) EV tax credit. Below are all the nameplates that currently qualify as of July 1st, 2024, but it’s best to keep in mind not every configuration of each vehicle qualifies, nor does each vehicle qualify for the entire credit (some only receive $3,750), so it’s best to check the website for the most up-to-date information.

EVs That Qualify As Of July 1st, 2024

Model

Year

Credit Amount

MSRP Limit

ZDX

2024

$7,500

$80,000

LYRIQ

2024

$7,500

$80,000

Blazer EV

2024

$7,500

$80,000

Bolt EUV

2022-2023

$7,500

$55,000

Bolt EV

2022-2023

$7,500

$55,000

Equinox EV

2024

$7,500

$80,000

F-150 Lightning

2022-2024

$7,500

$80,000

Prologue

2024

$7,500

$80,000

Leaf

2024

$3,750

$55,000

R1S

Years Differ By Trim

$3,750

$80,000

R1T

Years Differ By Trim

$3,750

$80,000

Model 3

Years Differ By Trim

$7,500

$55,000

Model X

Years Differ By Trim

$7,500

$80,000

Model Y

Years Differ By Trim

$7,500

$80,000

ID.4

2023-2024

$7,500

$80,000


PHEVs That Qualify As Of July 1st, 2024

2024 Jeep Wrangler 4xe Tuscadero Pink
Jeep

Model

Year

Credit Amount

MSRP Limit

Q5 PHEV

2023-2024

$3,750

$80,000

Corsair Grand Touring PHEV

2022-2024

$3,750

$80,000

Grand Cherokee PHEV

2022-2024

$3,750

$80,000

Wrangler PHEV

2022-2024

$3,750

$80,000

Pacifica PHEV

2022-2024

$7,500

$80,000

Escape PHEV

2022-2024

$3,750

$80,000


What To Expect In The Future From The Tax Credit

As we’ve already touched on, the tax credit requirements are just going to get much more stringent, so it’s best to expect this list to continue to shrink and grow as the years progress. The goal of the credit isn’t to make EVs cheaper forever but to spur adoption while giving automakers to build up their supply chains to produce the vehicles for less. Since its introduction, a multitude of companies, from GM to Hyundai to Volkswagen have all announced sprawling investments in North America to produce vehicles and batteries here.

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More Americans Are Turned Off By EVs Than Ever Before

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Unfortunately, given the waning demand for EVs into 2024, many of these investments have been scaled back. Despite the discounts offered, most Americans still cannot afford to spend $50,000 or more on a new car, and most are turning instead to fuel-efficient hybrids as they offer the benefits of gasoline while reducing emissions and saving owners money at the pump.


What’s also unclear is how a second-term win for former President Donald Trump could affect the tax credit moving forward. President Trump has been openly critical of the Inflation Reduction Act in the past, and it’s possible it could be a target if he once again ascends to the Presidency. Carbuzz will continue to cover all facets of the EV Tax Credit as it evolves into the future, so be sure to check back often for the most up-to-date news.



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