2024 EV Tax Credit – Which Cars Qualify & How It Works

Last Updated: January 25, 2024

If you’re reading this piece, you’ve probably already heard about the Federal EV Tax Credit. However, did you know that the tax credit for an EV purchased (and put into service) between January 1st, 2023, and April 18th, 2023, may not qualify for the same credit as an EV bought during the rest of 2023? And how about additions to the Federal EV Tax Credit in 2024? 

Keeping up with the EV Tax Credit situation can be (very) confusing, so here’s what we know about the EV Tax Credit right now and what it will look like for the rest of 2024:

Tax Credit 101: What Is the EV Tax Credit, and How Do I Get It?

Before we start: this article is for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. We’re experts in EVs, not tax law. Please consult your own accounting, tax, and legal advisors before engaging in any transaction.

What Is the Federal EV Tax Credit?

The Federal EV Tax Credit, now officially known as the Clean Vehicle Credit, was implemented to help spur the purchase and production of EVs in the US to help reduce emissions, slow global warming, and so on. The credit was previously known as the Plug-In Electric Drive Motor Vehicle Credit.

As a refresher, a federal tax credit is an amount that reduces the amount of tax money that you owe to the IRS when you file your taxes for the year. Practically speaking, a tax credit can effectively reduce the price of an EV (provided you are in a position to owe federal tax money, which most people are).

The non-refundable Federal EV tax credit is only subtracted from what you already owe. For example, if the credit is worth $7,500 and you owe $20,000 in taxes, then you would receive the full value of the credit (reducing your taxes owed to $13,500). If you owe less than the credit, such as $3,000, then the credit would only be worth $3,000 (reducing your taxes owed to 0). You won’t get a refund check for the remaining $4,500 in possible tax credit.

How Do I Claim the EV Tax Credit?

In order to claim an EV tax credit, buyers need to purchase a qualifying EV (we’ll get to which EV makes, models, and years qualify later in this article).  A buyer will need to make sure the dealer or manufacturer gives them a copy of the EV’s letter of certification (an official document from the IRS) which describes the make, model, and tax year that would qualify their EV for a Clean Vehicle Credit. This letter provides the consumer with proof of their vehicle’s eligibility for the credit when it’s time to file federal taxes.

Next, buyers need to file the appropriate tax form (Form 8936) to claim the EV tax credit during the year the EV is put into service (this can be an important distinction if you sign a contract for purchase in a different year than actually receiving delivery of your EV). Your local tax professionals can help you figure out how to file properly to get the highest credit value possible. If you file your taxes yourself, be sure to check out the IRS website for a full explanation of Form 8936.

New for 2024: The Point-Of-Sale (POS) Tax Credit

Dealerships and manufacturers that qualify may be able to give you your tax credit up front by transferring the credit to themselves and giving you the same amount as a discount on your EV purchase (at the point-of-sale). This would essentially be a rebate for consumers —and yes, there’s certainly debate about whether or not this will help keep EV prices affordable.

We’ll be covering the POS EV Tax Credit in-depth in a later article, but for now, please note that the POS credit is still dependent on your Modified Adjusted Gross Income qualification, the EV’s qualification for the credit, and the dealership’s qualification for the program.

The Federal EV Tax Credit: 2023-2024

There are very few differences to note in the EV Tax Credit law between 2023 and 2024. Let’s take a look at the variations in the 2023 EV Tax Credit first, then go through a few lists of eligible EVs in 2023 and 2024:

The IRS has published a list of vehicles which qualify for the credit, which we’ve updated below. However, there have already been several amendments, so we’re continuing to monitor the situation and update the list as new info is released.

The new Clean Vehicle Credit is in effect after January 1st, 2023, and extends to December of 2032. This credit gives the same non-refundable credit amount as before ($7,500), but there are several changes regarding which new EVs (Battery Electric Vehicles, or BEVs) and PHEVs (Plug-In Hybrid Electric Vehicles) qualify.

One good change is that the manufacturer’s sales cap of 200,000 electric vehicles has been eliminated, potentially giving some tax relief to those looking to buy from Tesla and GM. However, other changes exclude several vehicles from each of those manufacturers thanks to their selling price.

The upcoming EV tax credit only applies to new electric cars with an MSRP of $55,000 or less, and zero-emissions electric SUVs, trucks, or vans with MSRPs of $80,000 or less. 

EV Qualification Requirements Between January 1st, 2023, to April 17, 2023

The initial credit amount available in 2022 and early 2023 is different from the current amount. The IRS states a base credit amount of $2,500 with tiers of available credit based on battery capacity. However, the maximum credit limit is the same at $7,500.

EVs put into service between the beginning of 2023 and April 17th (2023) are not subject to the battery component and critical minerals eligibility requirements for qualifying EVs put into service on or after April 18th (2023). We’ll look at those requirements next:

EV Qualification Requirements On or After April 18th, 2023 

The new requirements regarding battery components and critical minerals qualify or disqualify vehicles even if they are assembled in North America and are under the price threshold. These requirements come in two parts:

1. Critical Minerals: The law states that $3,750 of the tax credit requires “the value of the battery’s critical minerals that are extracted or processed in the United States or a U.S. free-trade agreement partner or recycled in North America” in 2023 to be 40%. That percentage goes up to 50% in 2024 and all the way up to 80% in 2027.
2. Battery Components: In 2023, at least 50% of the battery’s components must be manufactured or assembled in North America to qualify an EV for the next $3,750 of the Clean Vehicle credit. That percentage goes up to 60% in 2024 and all the way up to 100% in 2029.

For more information on the exact terms of the new Clean Vehicle Credit materials requirements, check out the Department of Energy’s EV Tax Credit explanation page.

PHEVs will also still qualify for the credit if they meet the same requirements we’ve already covered and have a battery of over 7kWh.

For the 2023 tax year, individuals are no longer eligible to claim the Clean Vehicle Credit if their income exceeds:

• $150,000 filing singly 
• $300,000 filing jointly 
• $225,000 filing head of household 

However, because the credit can be used at the point of sale and before the tax year is over, the IRS has now added the option to determine your eligibility based on your Modified Adjusted Gross Income of either the year you take delivery of the EV or from the year prior (whichever is less). 

Next, let’s take a look at the two current lists of qualifying EVs (and PHEVs):

Which EVs Qualify for the Clean Vehicle Tax Credit in 2023-2024?

According to the latest IRS data, here are the manufacturers and models that qualify for the Clean Vehicle Credit, including their MSRP price limit:

EVs and PHEVs Qualifying for the Clean Vehicle Credit (put into service after January 1, 2023, and before April 18, 2023)

• 2023 Audi Q5 TFSI e Quattro (PHEV) – $80,000
• 2021, 2022, 2023 BMW 330e – $55,000
• 2021, 2022, 2023 BMW X5 xDrive45e – $80,000
• 2022, 2023 Ford Escape Plug-In Hybrid – $80,000
• 2022, 2023 Ford E-Transit – $80,000
• 2022, 2023 Ford F-150 Lightning – $80,000
• 2022, 2023 Ford Mustang Mach-E – $55,000
• 2022, 2023 Lincoln Aviator Grand Touring – $80,000
• 2022, 2023 Lincoln Corsair Grand Touring – $55,000
• 2022, 2023 Chevrolet Bolt – $55,000
• 2022, 2023 Chevrolet Bolt EUV – $55,000
• 2022, 2023 Cadillac Lyriq – $55,000
• 2021, 2022, 2023 Nissan Leaf S – $55,000
• 2021, 2022 Nissan Leaf S Plus – $55,000
• 2021, 2022 NIssan Leaf SL Plus – $55,000
• 2021, 2022 Nissan Leaf SV – $55,000
• 2021, 2022, 2023 Nissan Leaf SV Plus – $55,000
• 2022, 2023 Rivian R1S – $80,000
• 2022, 2023 Rivian R1T – $80,000
• 2022, 2023 Chrysler Pacifica PHEV – $80,000
• 2022, 2023 Jeep Wrangler 4xe – $80,000
• 2022, 2023 Jeep Grand Cherokee 4xe – $80,000
• 2022, 2023 Tesla Model 3 Rear Wheel Drive – $55,000
• 2022, 2023 Tesla Model 3 Long Range – $55,000
• 2022, 2023 Tesla Model Y All-Wheel Drive – 7 seat variant (3-rows) – $80,000
• 2022, 2023 Tesla Model Y Long Range – 7 seat variant (3-rows) – $80,000
• 2022, 2023 Tesla Model Y Performance – 7 seat variant (3-rows) – $80,000
• 2022, 2023 Tesla Model Y All-Wheel Drive – 5 seat variant (2-rows) – $55,000
• 2022, 2023 Tesla Model Y Long Range – 5 seat variant (2-rows) – $55,000
• 2022, 2023 Tesla Model Y Performance – 5 seat variant (2-rows) – $55,000
• 2023 Volkswagen ID.4 – $55,000
• 2023 Volkswagen ID.4 Pro – $55,000
• 2023 Volkswagen ID.4 Pro S – $55,000
• 2023 Volkswagen ID.4 S – $55,000
• 2023 Volkswagen ID.4 AWD Pro – $80,000
• 2023 Volkswagen ID.4 AWD Pro S – $80,000
• 2022 Volvo S60 (PHEV) – $55,000
• 2022 Volvo S60 Extended Range – $55,000
• 2023 Volvo S60 T8 Recharge (Extended Range) – $55,000

When new guidance from the IRS came out about the Clean Vehicle Credit back in March of 2023, the list of qualifying EVs and PHEVs changed significantly for vehicles put into service on or after April 18, 2023. Some EVs/PHEVs have a reduced credit, while others have been removed from the list entirely. Here’s the updated list:

EVs and PHEVs Qualifying for the Clean Vehicle Credit (put into service from April 18, 2023 and beyond)

• 2023, 2024 Audi Q5 PHEV 55 TFSI e quattro* – 80,000
• 2024 BMW X5 xDrive50e – $80,000
• 2023, 2024 Cadillac LYRIQ – $80,000
• 2022, 2023 Chevrolet Bolt – $55,000
• 2022, 2023 Chevrolet Bolt EUV – $55,000
• 2024 Chevrolet Blazer – $80,000
• 2024 Chevrolet Equinox – $80,000
• 2024 Chevrolet Silverado – $80,000
• 2022, 2024 Chrysler Pacifica PHEV – $80,000
• 2022, 2023 Ford Escape Plug-In Hybrid* – $80,000
• 2022, 2023 Ford E-Transit* – $80,000
• 2022, 2023 Ford F-150 Lightning – $80,000
• 2022, 2023 Ford Mustang Mach-E* – $80,000
• 2022, 2023, 2024 Jeep Wrangler 4xe* – $80,000
• 2022, 2023, 2024 Jeep Grand Cherokee 4xe* – $80,000
• 2022, 2023 Lincoln Aviator Grand Touring – $80,000
• 2022, 2023 Lincoln Corsair Grand Touring* – $80,000
• 2024 Nissan LEAF S* – $55,000
• 2024 Nissan LEAF SV PLUS* – $55,000
• 2022, 2023, 2024 Rivian R1S* – $80,000
• 2022, 2023, 2024 Rivian R1T* – $80,000
• 2024 Tesla Cybertruck – $80,000
• 2022, 2023 Tesla Model 3 Standard Range RWD – $55,000
• 2023 Tesla Model 3 Long Range AWD – $55,000
• 2022, 2023 Tesla Model 3 Performance – $55,000
• 2023 Tesla Model Y Long Range AWD – $80,000
• 2022, 2023 Tesla Model Y Standard AWD – $80,000
• 2022, 2023 Tesla Model Y Long Range – $80,000
• 2022, 2023 Tesla Model Y Performance – $80,000
• 2023 Tesla Model Y Standard RWD – $80,000
• 2023 Tesla Model X Long Range – $80,000
• 2023 Volkswagen ID.4 – $80,000
• 2023 Volkswagen ID.4 Pro – $80,000
• 2023 Volkswagen ID.4 Pro S – $80,000
• 2023 Volkswagen ID.4 Pro S Plus – $80,000
• 2023 Volkswagen ID.4 S – $80,000
• 2023 Volkswagen ID.4 AWD Pro – $80,000
• 2023 Volkswagen ID.4 AWD Pro S – $80,000
• 2023 Volkswagen ID.4 AWD Pro S Plus – $80,000

*denotes a 3,750 credit instead of the full 7,500

Before we move on to the FAQ, we’d like to mention one more addition to the EV tax credit that became available in 2023:

Ready in 2023-2024: The Used EV Tax Credit

For the recently legislated Used EV Tax Credit (officially known as the Credit for Previously-Owned Clean Vehicles), there’s good news and bad news:

The good news is that the Used EV Tax Credit finally became available in 2023! We’re excited that lawmakers are finally seeing the value in encouraging folks to buy a used EV. The non-refundable credit goes up to $4,000 or 30% of the used EV’s sales price (whichever is lower).

Unfortunately, the bad news is that the used electric vehicle credit has some pretty stiff restrictions on who can benefit from it and which used EVs qualify:

• Those with a Modified Adjusted Gross Income (MAGI) of over $75,000 individually, $150,000 jointly, or $112,500 as head of household are not eligible to claim the used EV credit
• Used EVs must be purchased 2 years past their model year
• The sales price of the used EV must not exceed $25,000
• The vehicle only qualifies for the credit once
• Each individual may only claim one used EV credit in a 3 year period
• The sale must take place through a qualified dealer

While the current Used EV Tax Credit law makes no provision for private sales of used EVs, there is actually an IRS approved way to make it work! For more information, see “How to Get the Used EV Tax Credit in 2024.”

The following used electric vehicles may be eligible for the used EV tax credit in 2023 (and 2024):

If you’re searching for used EVs that may qualify for the tax credit, you can start by checking out our listings page and filtering by price. Be sure to check out our guide to getting the Used EV Tax Credit for more info!

EV Tax Credit FAQ

How do EV tax credits work?

An EV tax credit is an amount that you can claim to reduce your tax burden. If you purchase a qualifying vehicle, you would use IRS Form 8936 to figure out your credit amount.

How do I qualify for the EV tax credit?

As a taxpayer, you can qualify for the EV tax credit by:

• Purchasing an eligible new EV
• After January 1st, 2023, having a Modified Adjusted Gross Income (MAGI) of under $150,000 when filing individually, $300,000 filing jointly, or $225,000 filing as head of household
• After January 1st, 2023, purchasing an eligible used EV, and having a MAGI at or under 75,000 individually, 150,000 jointly, or 112,500 as head of household

Can I claim my EV tax credit?

Yes, if you’ve purchased an eligible EV, you can claim your EV tax credit in the same calendar year that you put the EV into service.

After January 1st, 2023, you may also be able to pass your credit on to a qualified dealership at the point of sale, effectively allowing you to use your credit like a rebate to reduce the up-front cost of an eligible new EV.

When will the EV tax credit be available?

The EV tax credit is already available for the 2022 tax year, but conditions for eligibility have changed after January 1st, 2023. For more details, see the full discussion in the section “The Federal EV Tax Credit: 2022 vs 2023” above.

How do I file for the EV tax credit?

You can file for the EV Tax credit by filling out IRS Form 8936. Please consult your local tax professional for details.

Is the EV tax credit refundable?

No, the EV Tax Credit is non-refundable.

Are there credits for EV chargers?

Yes! While the previous federal credit expired in 2021, The Inflation Reduction Act reinstated it. For more information on the EV charger Credit, please see the IRS.gov website.

How many EV tax credits can you claim per year?

You can claim one Clean Vehicle Credit (for new EVs) per person per year. For qualifying pre-owned (used) EVs, you can only claim a credit once every three years.