The IRS released a list of electric vehicles that still qualify for the full $7,500 federal tax credit after the strict new guidelines officially go into effect on April 18. the list is very In short, since only six electric vehicles now qualify under the new terms. The updated rules pertain to EV batteries and remove China as an approved trading partner, so we knew the list of vehicles would be narrowed as most EVs use batteries made in China or by Chinese companies.
If you want that full tax credit, choose from the Cadillac Lyriq, Chevy Bolt, Chevy Bolt EUV, some Tesla Model 3 trims, some Tesla Model Y trims, and the Ford F-150 Lightning. Many electric vehicles lose all credit in the future, such as the Nissan Leaf and the Volkswagen ID.4. So check out the full list on your next car purchase. $7,500 is nothing to sneeze at.
Electric vehicles diverted from the exclusive full tax credit club can still qualify for a $3,750 half credit, as long as they meet certain requirements. Three PHEVs also qualify for a half credit and three more qualify for the full tax credit, including models made by Ford, Lincoln, Chrysler and Jeep. These credits are not about excluding hybrid technology and are about making sure the components are sourced correctly.
Here’s how that breaks down. Battery components made or assembled 50% in the US qualify for the first half of $3,750 and if the company sources at least 40% critical minerals from the US or the other standard, the vehicle earns half credit.
While the list narrowing down to just six vehicles is a good headline, it should be strengthened as automakers make changes to comply with the rules. New electric vehicles that meet component sourcing standards will be added to the list, and other vehicles will be added again as manufacturers open new factories in the US and other approved countries. New trade agreements could also affect the list of approved vehicles as time progresses. However, these rules get stricter over time. The batteries must be made entirely in North America by 2029 to continue to be on the good side of the IRS and get that full $7,500 credit.