Explore All EV & PHEV Models Eligible For Federal Tax Credits In 2024

Federal tax credits remain a crucial tool for making electric vehicles (EVs) more affordable for American buyers. However, big changes loom on the horizon with the Trump administration’s proposal to eliminate these incentives. As a result, understanding the current landscape of EV tax credits has never been more important for potential buyers.

The federal government offers up to $7,500 in tax credits for new EVs and plug-in hybrids (PHEVs), making the transition to electric mobility more financially accessible. Think of these credits as the government’s way of sharing the cost of your environmentally conscious choice—essentially offering a significant discount on your purchase price.

To better understand how these credits work, imagine them as a two-part equation: The first $3,750 depends on where the battery components come from, while the second $3,750 is tied to where the critical minerals in the battery are sourced. This split system reflects a broader policy goal of strengthening domestic manufacturing and reducing dependence on foreign supply chains.

Let’s explore the vehicles that currently qualify for these valuable incentives. These vehicles represent the cream of the crop when it comes to tax credit eligibility, meeting all federal requirements for both battery components and critical minerals and buyers can get the full credit if placed in service between Jan. 1 and Dec. 31 of 2024:

These vehicles qualify for half the maximum credit, typically meeting either the battery component or critical mineral requirements if placed in service between Jan. 1 and Dec. 31 of 2024, but not both:

Here’s an interesting twist in the tax credit story: leasing an EV might actually provide more flexibility than purchasing. When you lease, the vehicle qualifies for a $7,500 commercial credit that isn’t subject to the same strict requirements as the consumer credit. Think of it as a backdoor to savings—even high-income earners or those interested in vehicles that don’t typically qualify might benefit through a lease.

For example, if you are interested in the Hyundai IONIQ 5, which doesn’t qualify for the purchase credit due to its assembly location, you might still capture the full $7,500 savings through a lease. However, it is crucial to verify that the dealership passes these savings along to you—always request an itemized bill of sale showing the credit application.

Notably, used EV buyers can also benefit from federal tax credits. The program offers either $4,000 or 30% of the vehicle’s price (whichever is lower) for qualifying used EVs. However, there are some important conditions to understand:

With the proposed elimination of these tax credits by the Trump administration, timing becomes crucial for potential EV buyers. While rushing into a purchase solely for tax benefits is not advisable, those who have already researched their options and found their ideal EV might want to act sooner rather than later.

The potential changes could significantly impact both consumer affordability and the broader EV market. Manufacturers have made substantial investments in U.S.-based production facilities, partially in response to these incentives. Their elimination could reshape the industry’s development strategy and affect future EV pricing and availability.

Read More: BEVs vs ICEs: Total Cost Of Ownership

Remember, though, that any EV purchase should align with your needs and budget first, with the tax credit serving as a bonus rather than the primary motivation.

Want to learn more about EV? Thinking of buying an EV? Head over to EV.com and discover more.

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