Buying a New Electric Car in 2024: Here’s Every Model Eligible for the Federal EV Tax Credit

The list is unfortunately short

By
Zach Butler
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(Image: TFL Studios)

If you’re looking for the full $7,500 federal EV tax credit on a new EV, you don’t have too many options.

With all the hubbub you see and hear about new electric cars hitting the market every five minutes, you’d think there’s more opportunity than ever to take full advantage of Uncle Sam’s $7,500 incentive and take the plunge. Sadly, that’s not the case: While you can get the tax credit as a point-of-sale reduction in the car’s price as of January 1, the list of EVs that are actually eligible for the credit is a depressingly short one — at least for now.

As part of the Inflation Reduction Act (IRA), the U.S. government stipulates electric models must meet certain criteria to get the federal tax credit. Those include:

  • Having a battery capacity greater than 7 kilowatt-hours (so conventional hybrids don’t count);
  • The gross vehicle weight rating (GVWR) must be less than 14,000 pounds;
  • Must be made by a qualified manufacturer;
  • Must undergo final assembly in North America;
  • 2024 model year EVs have to meet stricter battery component sourcing requirements;
  • Trucks, SUVs and vans cannot have a MSRP over $80,000;
  • Passenger cars cannot exceed $55,000 MSRP.

The final assembly, battery sourcing and MSRP limitations knock most current EVs out of the running for a tax credit in 2024. Take the Hyundai Ioniq 5 and Kia EV6, for example: Both are built in South Korea, so neither model is eligible for the incentive, full stop. Certain models that were eligible in 2023 are no longer on the list, including the Chevy Blazer EV (though there’s currently a stop-sale on it, anyway) and the Cadillac Lyriq. Certain components render those vehicles ineligible right now, though GM says it’s changing sources for those components and the cars will be eligible again in “early 2024”.

Keep in mind that we’re only talking about the federal tax incentive here. Some states offer additional credits toward new EVs, though the eligibility requirements and amounts naturally differ by which state you live in. Our home state of Colorado, for instance, offers up to $5,000 toward a new EV with a purchase price under $80,000, or a $7,500 credit on models under $35,000.

2022 Chevrolet Bolt EUV
(Image: General Motors | Chevrolet)

So, which vehicles are eligible for the federal tax credit?

  • Chevrolet:
    • 2022-2023 Bolt EV: $7,500 (MSRP cap: $55,000)
    • 2022-2023 Bolt EUV: $7,500 (MSRP cap: $55,000)
    • *GM discontinued the Bolt after the 2023 model year. The credit will still apply to remaining dealer stock, and the automaker plans to reintroduce the Bolt sometime in late 2025
  • Chrysler:
    • 2022-2024 Pacifica PHEV: $7,500 (MSRP cap: $80,000)
  • Ford:
    • 2022-2024 Escape Plug-in Hybrid: $3,750 (MSRP cap: $80,000)
    • 2022-2024 F-150 Lightning (Standard or Extended Range): $7,500 (MSRP Cap: $80,000)
  • Jeep:
    • 2022-2024 Grand Cherokee 4xe PHEV: $3,750 (MSRP cap: $80,000)
    • 2022-2024 Wrangler 4xe PHEV: $3,750 (MSRP cap: $80,000)
  • Lincoln:
    • 2022-2024 Corsair Grand Touring PHEV: $3,750 (MSRP cap: $80,000)
    • *Lincoln discontinued the Aviator Grand Touring for the 2024 model year
  • Rivian:
    • 2023-2024 R1T Dual/Quad Motor with Large or Max Pack: $3,750 (MSRP cap: $80,000)
    • 2023-2024 R1S Dual/Quad Motor with Large Pack: $3,750 (MSRP cap: $80,000)
  • Tesla:
    • 2023-2024 Model 3 Performance: $7,500 (MSRP cap: $55,000)
      • *RWD Model 3 and AWD Model 3 Long Range models are not currently eligible for the federal EV tax credit.
    • 2023-2024 Model X Long Range: $7,500 (MSRP cap: $80,000)
    • 2024 Model Y RWD: $7,500 (MSRP cap: $80,000)
    • 2023-2024 Model Y Long Range: $7,500 (MSRP cap: $80,000)
    • 2023-2024 Model Y Performance: $7,500 (MSRP cap: $80,000)

The EVs that no longer qualify

Apart from the Chevy Blazer EV and Cadillac Lyriq falling off the list, several other established EVs that were on the list for 2023 are no longer eligible for the tax credit. Some versions of the Tesla Model 3, the Ford Mustang Mach-E and the Nissan Leaf no longer qualify, either. For the moment, at least, it appears the Chevy Equinox EV and Silverado EV won’t be in contention for the tax credit, until GM hammers out battery component sourcing concerns.

It’s also worth noting, however, that GM reportedly will offer its own $7,500 incentive to buyers “for any vehicles that became ineligible due to the new guidelines.” Perhaps a surprising move since EVs are fantastically unprofitable, but the automaker may be looking at the bigger picture of cratering EV sales volumes against losing money on a relatively small number of cars (a loss which GM’s more profitable model lines can absorb).

The IRA splits the tax credit into two $3,750 pieces:

  • EVs must source at least 60% of the car’s battery components from North America
  • At least 50% of the critical minerals in the vehicle’s battery pack must be extracted or processed in North America, or a country with which the U.S. has a free trade agreement

Here is the latest EPA Tax Incentive page.

Automakers are currently in the process of shifting their production resources to North America to comply with the IRA’s requirements if they aren’t already here. The list will inevitably broaden as that happens, but your short list of EVs eligible for the full $7,500 incentive is indeed short for the time being. Lawmakers wrote the framework of the IRA ostensibly to reduce U.S. reliance on materials and components manufactured or assembled by “foreign entities of concern”, including China.

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