Not a day goes by without a discussion regarding electric cars’ eligibility for the $7,500 federal tax credit, as many auto sales professionals experience a barrage of questions about which models are included and how to qualify.
For instance, electric vehicles (EV) like Tesla and GMC Bolt as well as Hummer EV do not qualify for this federal tax credit since they have sold more than 200,000 vehicles as did the Chevrolet Bolt EV and larger Bolt EUV, and therefore these are no longer eligible for any tax credit.
The confusion often arises because of the way the law was written and how the federal government tax code is written with phrases like: “… you may qualify, for up to …”.
The usual questions most car buyers ask from their auto salesperson are:
Do I qualify?
How much do I qualify for?
Which models are included?
Are hybrid cars fully tax deductible?
Are there other incentives along with the federal tax credit?
If you are thinking about buying an electric vehicle, there are many makes and models that do qualify for the federal tax credit and somewhere around 30+ new models are expected to be added to this list, and on sale by end of 2022.
Two essential aspects of EV to consider before buying one, is of course the federal tax credit and second is how far you can drive to work and back each day. EV cars need recharging (based on range).
You also need to consider how to “refuel” or recharge an EV, including possible home improvements to support EV charging in your garage, and how long it takes to charge and where to charge publicly. Each EV manufacturer offers a unique set of challenges and options when it comes to charging capabilities.
Electric Cars Eligible for the Full $7,500 Tax Credit
Audi: E-Tron (EV), E-Tron Sportback (EV), E-Tron SUV (EV), A7 TFSI e Quattro (PHEV), Q5 TFSI e Quattro (PHEV)
Bentley: Bentayga Hybrid (PHEV)
BMW: i4 (EV), ix (EV), X5 xDrive45e (PHEV)
Chrysler: Pacifica Hybrid (PHEV)
Ford: Mustang Mach-E (EV), E-Transit (EV), F-150 Lightning (EV)
Honda: Clarity Plug-in Hybrid (PHEV)
Hyundai: Ioniq 5 (EV), Kona EV
Genesis: GV60 (EV)
Jaguar: I-Pace (EV)
Jeep: Wrangler 4xe (PHEV), Grand Cherokee 4xe (PHEV)
Kia: Niro EV (EV), EV6 (EV)
Land Rover: Range Rover (PHEV), Range Rover Sport (PHEV)
Lexus: NX (PHEV)
Lucid: Air (EV)
Mazda: MX-30 (EV)
Mercedes-Benz: EQS (EV)
Mini: Cooper SE Hardtop (EV)
Nissan: Leaf (EV)
Polestar: 1 (PHEV), 2 (EV)
Porsche: Cayenne (PHEV), Panamera (PHEV), Taycan (EV)
Rivian: R1T (EV), R1S (EV)
Subaru: Solterra (EV)
Toyota: RAV4 Prime (PHEV)
Volkswagen: ID.4 (EV)
Volvo: S60 Recharge (PHEV), S90 Recharge (PHEV), V60 Recharge (PHEV), XC40 Recharge (EV), XC60 Recharge (PHEV), XC90 Recharge (PHEV)
Before you finally decide to purchase your EV, do consider all the incentives that you may qualify for in order to receive the maximum federal tax credit amount. You may also contact and speak with a tax professional or CPA because the main federal incentive remains a $7,500 tax credit that will come as a reduction to your tax liability and not a $7,500 check in the mail. This has remained, persistently, a mistake made by many car buyers.
Generally speaking, every $1,000 offered as a rebate or tax credit increases average sales of electric vehicles by 2.6%. HOV lane access is a significant contributor to adoption, the effect is a 4.7% increase corresponding to density of HOV lanes (every 100 vehicles per hour).
States with the best EV incentives
The federal government offers a tax credit for EV charger hardware and EV charger installation costs. It covers 30% of the costs with a maximum $1,000 credit for residents and $30,000 federal tax credit for commercial installs. Incentives also may exist to help with home charging by offering rebates or tax credits on the purchase of home charging equipment or installation of home charging circuits. Some automakers offer rebates to help with home charging, including Chevrolet for the Bolt EV and Bolt EUV that provide up to a $1,000 credit toward home charger installation.
When deciding on which EV to choose, as yourself the following questions regarding your choice for the best electric car for you, your family, and your budget:
Which EV is best value for money?
What is the best EV by consumer reports?
Which EVs hold their value?
Why you shouldn’t buy an electric car?
Is it worth buying an EV?
Finally, when choosing an EV, car buyers need to compare battery efficiency. This can be done by dividing the official WLTP (worldwide standard for measuring new car fuel economy, electric driving range and emissions) range by the usable capacity of the battery in kWh. The higher the figure the better. As more affordable EVs arrive, the basics outlined above will remain the same on how to pick the best EV for you.
Plug-in hybrid electric vehicles (PHEVs)
Note: Here are some of the more popular models. The US Department of Energy offers the full detailed list on its website.
A3 e-tron / e-tron ultra (2016-2018) $4,502
A7 55 TFSI e Quattro (2021) $6,712
A7 TFSI e Quattro (2022) $7,500
A8L PHEV (2020) $6,712
A8L 60 TFSI e Quattro (2021) $6,712
Q5 PHEV (2020) $6,712
Q5 55 TFSI e Quattro (2021) $6,712
Q5 TFSI e Quattro (2022) $7,500
Bentayga Hybrid (2020-2021) $7,500
i3 Sedan w/ Range Extender (2014-2021) $7,500
i3s w/ Range Extender (2018-2021) $7,500
BMW i8 (2014-2017) $3,793
i8 Coupe/Roadster (2018-2020) $5,669
X3 xDrive30e (2020-2021) $5,836
X5 xDrive40e (2016-2018) $4,668
X5 xDrive45e (2021-2022) $7,500
330e (2016-2018) $4,001
330e/330e xDrive (2021-2022) $5,836
530e/530e xDrive (2018-2019) $4,668
530e/530e xDrive (2020-2022) $5,836
740e (2017) $4,668
740e xDrive (2018-2019) $4,668
745e xDrive (2020-2022) $5,836
Pacifica Plug-In Hybrid (2017-2022) $7,500
SF90 Stradale (2020-2021) $3,501
Karma Sedan (2012) $7,500
C-Max Energi (2013-2017) $4,007
Fusion Energi (2013-2018) $4,007
Fusion Energi (2019-2020) $4,609
Escape Plug-in Hybrid (2020-2022) $6,843
GENERAL MOTORS (GM)
Not currently eligible for tax credits
Accord Plug-in Hybrid (2014) $3,626
Clarity Plug-in Hybrid (2018-2021) $7,500
Ioniq Plug-in Hybrid (2018-2022) $4,543
Sonata Plug-in Hybrid (2016-2019) $4,919
Tucson Plug-in Hybrid (2022) $6,587
Santa Fe Plug-in Hybrid (2022) $6,587
Grand Cherokee PHEV (2022) $7,500
Wrangler Unlimited PHEV (2021-2022) $7,500
Revero (2018-2020) $7,500
Niro Plug-in Hybrid (2018-2022) $4,543
Optima Plug-in Hybrid (2017-2020) $4,919
Sorento Plug-in Hybrid (2022) $6,587
Range Rover/Sport PHEV (2019) $7,087
Range Rover/Sport PHEV (2020-2022) $6,295
Range Rover SE PHEV (2023) $7,500
Rover Range Rover Sport Autobiography PHEV (2023) $7,500
NX Plug-in Hybrid (2022) $7,500
Aviator Grand Touring (2020-2022) $6,534
Corsair Reserve Grand Touring PHEV (2021-2022) $6,843
Corsair Grand Touring PHEV (2022) $6,843
Artura (2022) $4,585
S550e Plug-in Hybrid (2015-2017) $4,460
GLE550e 4matic (2016-2018) $4,460
GLC350e 4matic (2018-2019) $4,460
GLC350e 4M EQ (2020) $6,462
S560e EQ PHEV (2020) $6,462
C350e (2016-2018) $3,501
Cooper S E Countryman ALL4 (2018-2019) $4,001
Cooper S E Countryman ALL4 (2020-2022) $5,002
Mitsubishi Outlander Plug-in (2018-2020) $5,836
Mitsubishi Outlander Plug-in (2021-2022) $6,587
Polestar 1 (2020-2021) $7,500
Cayenne S E-Hybrid (2015-2018) $5,336
Cayenne E-Hybrid / Coupe (2019-2020) $6,712
Cayenne Turbo S E-Hybrid / Coupe (2021) $7,500
Cayenne E-Hybrid / Coupe (2021-2022) $7,500
Panamera S E-Hybrid (2014-2016) $4,752
Panamera 4 E-Hybrid (2018) $6,670
Panamera 4 E-Hybrid (2019-2020) $6,712
Panamera 4 E-Hybrid (2021-2022) $7,500
Crosstrek Hybrid (2019-2022) $4,502
Not currently eligible for tax credits
Prius Plug-in Hybrid (2012-2015) $2,500
Prius Prime Plug-in Hybrid (2017-2022) $4,502
RAV4 Prime Plug-in Hybrid (2021-2022) $7,500
S60 (2019) $5,002
S60 (2020-2022) $5,419
S60 Extended Range (2022) $7,500
S90 (2018-2019) $5,002
S90 (2020-2022) $5,419
S90 Extended Range (2022) $7,500
V60 (2020-2022) $5,419
V60 Extended Range (2022) $7,500
XC60 (2018-2019) $5,002
XC60 (2020-2022) $5,419
XC60 Extended Range (2022) $7,500
XC90 (2016-2017) $4,585
XC90 / XC90 Excellence (2018-2019) $5,002
XC90 (2020-2022) $5,419
XC90 Extended Range (2022) $7,500
If you are interested in a career as an F&I Manager, you can CONTACT us to discuss our finance manager training courses. Our cutting-edge F&I Management Training Program, with both in-class and online courses is dedicated to educating the next generation of Finance & Insurance Managers for over 30 years.
If you are considering becoming an F&I Manager and work for a car dealership, Auto Dealer Institute can help. We provide Auto F&I Manager Training courses and we are the only licensed, independent F&I Training center in US. or over 32 years. Our Automotive Finance and Insurance Management training program has been teaching students the necessary skills to become a successful automotive finance and insurance manager, internet sales manager, desk/sales manager, or dealer representative.
Other articles you may be interested in, include: 1) F&I Process Management Trends; 2) 9-11 GI Bill Veterans benefits for education cost and finance manager training courses; 3) Auto sales lead generation techniques and trends; 4) The best and top 10 car sales professionals in the world; 5) Auto finance and insurance products and opportunities; 6) Electric Vehicle (EV) $7,500 federal tax credit; 7) Digital Edition of The Encyclopedia of Finance & Insurance Management; 8) Auto F&I finance manager training course financing options; 9) How to be a great auto sales professional; and 10) Auto Finance Manager Training Testimonials