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Here Are the Electric Vehicles That Are Eligible for the $7,500 Federal Tax Credit

The list of EVs that qualify for the $7,500 federal tax credit got a lot shorter in 2024, but it’s slowly climbing back up to 2023 numbers.

In 2023, 17 full EVs qualified for the credit. On Jan. 1, 2024, the list went down to just seven, but it’s now back up to 10 models. What’s going on here? Automakers are struggling to meet the government’s strict requirements on domestic battery sourcing. Most batteries come from China, which the US government does not want to subsidize through the credit.

The good news is many automakers have invested in US-based supply chains, qualifying models from highly desirable brands like Tesla, Ford, Volkswagen, and Rivian. Here’s how we got here and what you need to know about cashing in on the EV federal tax credit in 2024.

Tax Credit Drama: Eligibility Changes in 2024 vs. 2023

Keeping track of which EVs are eligible for the full $7,500 tax credit, or the $3,750 half credit, can feel like a full-time job. Federal battery requirements, as well as automakers’ supply chains, seem to change frequently.

The Inflation Reduction Act requires EVs to have a higher percentage of domestically sourced battery minerals and components every year until 2029. The percentage of domestic minerals went from 40% in 2023 to 50% in 2024, and the domestic battery components went from 50% to 60%. Also starting in 2024, the battery cannot contain any percentage of materials from “foreign entities of concern,” including China, Russia, North Korea, or Iran.

Take General Motors, for example, which spent most of 2023 working on its new Ultium battery pack. Before the New Year, all Ultium-equipped vehicles were tax-credit eligible, such as the brand new Blazer and Silverado, as well as the upcoming Equinox. GM told PCMag it expected all Ultium vehicles to retain tax credit eligibility in 2024.

2024 Chevrolet Blazer EV
(Credit: Chevrolet/GM)

But when the US Treasury published an updated list on fueleconomy.gov on Jan. 1, 2024, which incorporates the new battery requirements, none of the Ultium-powered vehicles were on it. Two “minor components” disqualified the packs, says Elizabeth Winter, senior manager of public policy communications at GM. “GM has pulled ahead sourcing plans for qualifying components in early 2024.”

Winter expects the Blazer to be back on the list in “early 2024,” though it still does not qualify as of this writing. GM’s Cadillac Lyriq, which also uses the Ultium pack, curiously regained eligibility in February 2024 even though the other vehicles have not.

The Volkswagen ID.4 also lost eligibility on Jan. 1, 2024, though regained it a month later. The Tesla Cybertruck also fell off the list, though the best-selling Model Y retained the full credit in three of its four trims. Though the Model 3 also initially lost eligibility due to its Chinese-made pack, the priciest Performance trim has since regained it.

Tesla Model 3
(Credit: Chloe Albanesius)

The popular Ford Mustang Mach-E (a PCMag Editors’ Choice award winner) and Nissan Leaf both lost eligibility. To compensate, Ford dropped the vehicle price below $40,000 for the first time. The Nissan Leaf is already the most affordable EV available, even without the tax credit.

Does Everyone Qualify for the EV Tax Credit?

Even if you’ve found a tax-credit-eligible EV you’re interested in, your income may disqualify you from getting it. Income caps seek to prevent federal funds from going to those who don’t need them; the buyer’s income must be under $150,000 for individuals, $225,000 for head of household, and $300,000 for married or jointly filing.

Starting in 2024, buyers recoup the funds at the dealer rather than waiting months until they file annual taxes. “In accordance with new IRS regulations, beginning January 1, 2024, Clean Vehicle Tax Credits must be initiated and approved at the time of sale,” reads the website with the list of eligible EVs. “Buyers are advised to obtain a copy of the IRS’s confirmation that a ‘time of sale’ report was submitted successfully by the dealer.”

Assuming you’re under those income caps, here is the full list of EVs and PHEVs that qualify for either the full $7,500 or $3,750 half credit if purchased and delivered in 2024.

EVs That Qualify for the Full $7,500 Credit

  • Cadillac Lyriq (2024)
  • Chevrolet Bolt (2022-2023)
  • Chevrolet Bolt EUV (2022-2023)
  • Ford F-150 Lightning (2022-2024), Standard and Extended range
  • Tesla Model 3 Performance (2023-2024)
  • Tesla Model X Long Range (2023-2024)
  • Tesla Model Y All-Wheel Drive (2023-2024), All-Wheel Drive, Performance, and Rear-wheel Drive
  • Volkswagen ID.4 (2023-2024), AWD Pro, AWD Pro S, AWD Pro S Plus, Pro, Pro S, Pro S Plus, S, and Standard

PHEVs That Qualify for the Full $7,500 Credit

EVs That Qualify for the $3,750 Half Credit

  • Rivian R1T (2023-2024), Dual Motor with Large Battery Pack, Dual Motor with Max Battery Pack, Quad Motor with Large Battery Pack
  • Rivian R1S (2023-2024), Dual Motor with Large Battery Pack, Quad Motor with Large Battery Pack

PHEVs That Qualify for the $3,750 Half Credit

  • Ford Escape Plug-in Hybrid (2022-2024)
  • Jeep Grand Cherokee 4xe (2022-2024)
  • Jeep Wrangler PHEV 4xe (2022-2024)
  • Lincoln Corsair Grand Touring (2022-2024)

This article was originally published by a me.pcmag.com . Read the Original article here. .

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