Which EVs Qualify for the New Electric Vehicle Tax Credit?

• New electric and fuel-cell vehicles will get a tax credit of up to $7,500. Some plug-in hybrid vehicles will also continue to qualify.

• Only vehicles that cost below a certain amount will qualify. For SUVs, pickup trucks, and vans, the threshold is $80,000. For sedans, hatchbacks, wagons, and other vehicles, the credit cuts off at $55,000. (Read more about lower-priced EVs.) This provision may not apply if a vehicle is leased.

• There will be no limit on the number of vehicles an automaker can sell that are eligible for the credit. 

• Unlike in prior years, the exact amount of the new tax credit will depend on a complex set of calculations based on where the vehicles are assembled and where the materials that make up their batteries are from. Once these requirements go into effect in March, they get stricter each year through 2026. This provision may not apply if a vehicle is leased.

• Only vehicles assembled in North America will be eligible for a tax credit. This provision may not apply if a vehicle is leased.

• The exclusion of vehicles with components from “foreign entities of concern,” including Russia and China, will go into effect Dec. 31, 2023. This provision may not apply if a vehicle is leased.

• Starting in 2024, dealerships will be able to offer the value of a tax credit up front to consumers. This may simplify the process for car buyers.

• Car buyers must meet certain income guidelines. Households with an adjusted gross income up to $300,000 will still qualify for the credit, while heads of household must earn below $225,000 and individual filers will qualify only with income below $150,000. This provision may not apply if a vehicle is leased.

• For the first time, buyers of used EVs will get a tax credit: either $4,000 or 30 percent of the sale price of the vehicle—whichever is lower—but only if they buy a car from a dealership, and only if the vehicle wasn’t previously resold after Aug. 16, 2022.

• The income threshold is lower for used-EV buyers: $150,000 for joint filers, $112,500 for a head of household, or $75,000 for an individual.

• Bidirectional EV chargers—ones that can also power your house using the energy stored in your car’s battery—are now eligible for tax incentives.