Up to $7,500 Credit on New Electric Vehicles
The US Department of Energy’s Office of Energy Efficiency & Renewable Energy manages and updates information on tax credits for every model of electric vehicle and plugin-hybrid electric vehicle, if purchased new. The credit amount varies based on the capacity of the battery used to power the vehicle. Individual state and local incentives may also apply.
Tesla vehicles purchased after December 2019 are not eligible for these tax credits. Also, General Motors vehicles purchased after March 2020 are not eligible for these tax credits.
To be certified for the credit by the manufacturer, the vehicle must meet the following requirements:
- The vehicle must be made by a manufacturer (i.e., it doesn’t include conventional vehicles converted to electric drive).
- It must be treated as a motor vehicle for purposes of title II of the Clean Air Act.
- It must have a gross vehicle weight rating (GVWR) of not more than 14,000 lbs.
- It must be propelled to a significant extent by an electric motor which draws electricity from a battery which
- has a capacity of not less than 4 kilowatt hours and
- is capable of being recharged from an external source of electricity.
The following requirements must also be met for a certified vehicle to qualify:
- The original use of the vehicle commences with the taxpayer—it must be a new vehicle.
- The vehicle is used for a majority of the time in the United States.
- The vehicle is acquired for use or lease by the taxpayer, and not for resale. (The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.)
Read more about claiming credit, phaseouts, and up-to-date info here.