Guide to Electric Cars’ Eligibility for the $7,500 Federal Tax Credit

Auto Sales Guide to Electric Cars’ Eligibility for the $7,500 Federal Tax Credit

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

Colorado.

Connecticut.

Delaware.

Maryland.

California.

Massachusetts.

Oregon.

New York.

federal government offers a tax credit for EV charger hardware and EV charger installation costs

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.

 

Make and Model                                         Full Tax Credit

—————————————————————————

AUDI

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

 

BENTLEY

Bentayga Hybrid (2020-2021) $7,500

 

BMW

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

 

CHRYSLER

Pacifica Plug-In Hybrid (2017-2022) $7,500

 

FERRARI

SF90 Stradale (2020-2021) $3,501

 

FISKER AUTOMOTIVE

Karma Sedan (2012) $7,500

 

FORD

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 

 

HONDA

Accord Plug-in Hybrid (2014) $3,626

Clarity Plug-in Hybrid (2018-2021)  $7,500

 

HYUNDAI

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

 

JEEP

Grand Cherokee PHEV (2022) $7,500

Wrangler Unlimited PHEV (2021-2022) $7,500

 

KARMA

Revero (2018-2020) $7,500

 

KIA

Niro Plug-in Hybrid (2018-2022) $4,543

Optima Plug-in Hybrid (2017-2020) $4,919

Sorento Plug-in Hybrid (2022) $6,587

 

LAND ROVER

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

 

LEXUS

NX Plug-in Hybrid (2022) $7,500

 

LINCOLN

Aviator Grand Touring (2020-2022)  $6,534

Corsair Reserve Grand Touring PHEV (2021-2022) $6,843

Corsair Grand Touring PHEV (2022) $6,843

 

McLAREN

Artura (2022) $4,585

 

MERCEDES-BENZ

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

 

MINI

Cooper S E Countryman ALL4 (2018-2019) $4,001

Cooper S E Countryman ALL4 (2020-2022) $5,002

 

MITSUBISHI

Mitsubishi Outlander Plug-in (2018-2020) $5,836

Mitsubishi Outlander Plug-in (2021-2022) $6,587

 

POLESTAR

Polestar 1 (2020-2021) $7,500

 

PORSCHE

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

 

SUBARU

Crosstrek Hybrid (2019-2022) $4,502

 

TESLA

Not currently eligible for tax credits

 

TOYOTA

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

 

VOLVO

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

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