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Back in 2022, the United States government passed the The Inflation Reduction Act (IRA) — a law which, in spite of its name, was actually primarily concerned with fighting climate change and investing in American infrastructure. As part of those moves, the new law made some critical changes to the $7,500 federal tax credit available for electric vehicles. The law eliminated the 200,000-unit manufacturer cap that saw Tesla and GM EV buyers lose access to the credit prior to the IRA’s arrival — but it also imposed some onerous and confusing restrictions on which vehicles were eligible.
And, as it so happens, those restrictions continue to change with the years as part of the law’s structure. For 2024, the rules concerning the $7,500 tax credit have shifted once again, and the tweaks now mean fewer vehicles are eligible for the full amount. Here’s what you need to know — and which new electric cars, trucks and SUVs are still eligible.
What are the Federal EV Tax Credit changes for 2024?
Point-of-sale rebate: Dealers can offer the federal tax credit to buyers as a point-of-sale rebate, instead of them having to claim it on the following year’s taxes. This will actually lower the monthly payment for buyers.
FEOC: The government implemented a “foreign entities of concern” provision. Essentially, any vehicle sourcing components or critical materials from China, Iran, Russia or North Korea is not eligible for the federal tax credit. This provision eliminated several EVs from the list.
Electric Vehicles That Qualify for the 2024 Federal Tax Credit
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