How do EV tax credits work?

The maximum $7,500 federal EV tax credit consists of two equal parts: Battery Components and Critical Battery Minerals. In order to get the full amount, your EV or PHEV must satisfy the requirements of both parts. Your vehicle may only satisfy one part, in which case your tax credit will be $3,750. Until 2024, you'll need to claim your EV tax credit as part of your annual tax return via IRS Form 8936 . From 2024 onward, the Inflation Reduction Act empowers you to transfer your EV tax credit to a qualified car dealer at the point of sale, effectively converting it into a discount on the sale price and eliminating the lag time. Learn more

When are EV tax credits updated?

Federal EV tax credits received a massive update in the form of the Inflation Reduction Act of August 2022. This update changed the game for automakers that produce EVs, introducing many new incentives designed to shift EV production toward North America and U.S. free-trade partners more broadly, as well as make EVs more accessible to mainstream America. Within the Inflation Reduction Act, there are also numerous updates from year to year as new provisions kick in. Read our full writeup on the Inflation Reduction Act for comprehensive details. Learn more

Electric vehicle tax credits, rebates and other incentives

Use this tool to find tax credits, incentives and rebates that may apply to your purchase or lease of an electric vehicle. You'll find the latest federal, state and automaker-sponsored…

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Models (64)

Incentives (13)

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2023 Ford E-Transit Cargo Van
$8,500
Available Rebates
MSRP
$53,790 - $58,970
Up to 16% savings
Edmunds Rating
-
EPA Range
-
View 2023 Ford E-Transit Cargo Van Inventory
2023 Nissan LEAF
$8,100
Available Rebates
MSRP
$28,040 - $36,040
Up to 29% savings
Edmunds Rating
-
Edmunds Tested Range
237 mi.
View 2023 Nissan LEAF Inventory
2023 Volkswagen ID.4
$8,000
Available Rebates
MSRP
$37,495 - $53,745
Up to 21% savings
Edmunds Rating
-
EPA Range
275 mi.
View 2023 Volkswagen ID.4 Inventory
2023 Ford Escape
$7,500
Available Rebates
MSRP
$27,500 - $38,500
Up to 27% savings
Edmunds Rating
-
EPA Range
37 mi.
View 2023 Ford Escape Inventory
2023 Chevrolet Bolt EUV
$7,500
Available Rebates
MSRP
$27,800 - $32,300
Up to 27% savings
Edmunds Rating
8/10
Edmunds Tested Range
265 mi.
View 2023 Chevrolet Bolt EUV Inventory
2023 Chevrolet Bolt EV
$7,500
Available Rebates
MSRP
$26,500 - $29,700
Up to 28% savings
Edmunds Rating
8/10
Edmunds Tested Range
278 mi.
View 2023 Chevrolet Bolt EV Inventory
2023 Tesla Model Y
$7,500
Available Rebates
MSRP
$52,990 - $56,990
Up to 14% savings
Edmunds Rating
-
EPA Range
330 mi.
View Used 2023 Tesla Model Y Inventory
2023 Ford F-150 Lightning
$7,500
Available Rebates
MSRP
$46,974 - $96,874
Up to 16% savings
Edmunds Rating
8.4/10
Edmunds Tested Range
332 mi.
View 2023 Ford F-150 Lightning Inventory
2023 Ford Mustang Mach-E
$7,500
Available Rebates
MSRP
$46,895 - $69,895
Up to 16% savings
Edmunds Rating
-
EPA Range
312 mi.
View 2023 Ford Mustang Mach-E Inventory
2023 Tesla Model 3
$7,500
Available Rebates
MSRP
$43,990 - $53,990
Up to 17% savings
Edmunds Rating
-
EPA Range
315 mi.
View Used 2023 Tesla Model 3 Inventory
2023 Volvo XC40 Recharge Twin Pure Electric
$2,000
Available Rebates
MSRP
$53,550 - $59,500
Up to 4% savings
Edmunds Rating
-
EPA Range
223 mi.
View 2023 Volvo XC40 Recharge Twin Pure Electric Inventory
2023 Volvo C40 Recharge Twin Pure Electric
$2,000
Available Rebates
MSRP
$55,300 - $60,100
Up to 4% savings
Edmunds Rating
-
Edmunds Tested Range
252 mi.
View 2023 Volvo C40 Recharge Twin Pure Electric Inventory
2023 Hyundai IONIQ 5
$1,000
Available Rebates
MSRP
$41,450 - $56,500
Up to 2% savings
Edmunds Rating
8.3/10
Edmunds Tested Range
270 mi.
View 2023 Hyundai IONIQ 5 Inventory
2023 Genesis GV60
$1,000
Available Rebates
MSRP
$59,290 - $68,290
Up to 2% savings
Edmunds Rating
8.4/10
Edmunds Tested Range
274 mi.
View 2023 Genesis GV60 Inventory
2023 Hyundai Kona Electric
$1,000
Available Rebates
MSRP
$33,550 - $41,550
Up to 3% savings
Edmunds Rating
-
Edmunds Tested Range
308 mi.
View 2023 Hyundai Kona Electric Inventory
2023 Subaru Solterra
$900
Available Rebates
MSRP
$44,995 - $51,995
Up to 2% savings
Edmunds Rating
-
EPA Range
228 mi.
View 2023 Subaru Solterra Inventory

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Federal EV Tax Credits Overview

Shopping for an electric vehicle (EV) or a plug-in hybrid electric vehicle (PHEV)? According to the landmark Inflation Reduction Act of August 2022, you can get up to $7,500 in tax credits if you purchase an EV or a PHEV, but it very much depends on the make and model you're considering. We'll give you the highlights here and encourage you to visit our in-depth analysis of the Inflation Reduction Act for full details. Additional incentives may be provided at the state and local levels, but our purpose here is to summarize federal EV tax incentives, not state and local incentives.

Federal EV Tax Credit Incentive #1: North American Final Assembly

You can't get any EV tax credits or PHEV tax credits unless the vehicle was assembled in North America, full stop. In the short run, this leaves some automakers out in the cold, but the idea is to create a new incentive to build clean vehicles right here on our home turf. Notably, meeting this final assembly requirement doesn't automatically mean you get a tax credit -- it just gets your foot in the door. Provided that the vehicle is assembled in North America, it may qualify for federal tax credits if further conditions are met. Specifically, the maximum $7,500 federal EV tax credit is made up of two separate $3,750 credits, one targeting EV battery minerals and the other EV battery components.

Federal EV Tax Credit Incentive #2: Origin of Critical Battery Minerals ($3,750 Tax Credit)

As with vehicle assembly, the U.S. government also wants to move the sourcing of critical battery minerals closer to home, at least in terms of trade partnerships. To this end, increasing percentages of critical EV battery minerals must be sourced from the U.S. itself or a U.S. free-trade partner, starting with 40% for 2023. The minimum percentage escalates quickly to 80% by 2027. Unless the EV or PHEV you purchase meets this requirement, you won't have access to at least half of the $7,500 maximum federal EV tax credit.

Federal EV Tax Credit Incentive #3: Origin of Battery Components ($3,750 Tax Credit)

Moving back to the assembly side, the U.S. likewise wants to incentivize the production of battery components at home or in free-trade partner countries. To enable this half of the $7,500 maximum tax credit for 2023, at least 50% of your vehicle's battery components must have been produced in the U.S. or in countries that have free-trade agreements with the U.S. Note that the minimum threshold escalates steadily to a full 100% by 2029, whereas the previous requirement regarding battery minerals stops (for now) at 80% in 2027.

Federal EV Tax Credit Incentive #4: No Involvement by Blacklisted Countries After 2023

Here's another one that's just about getting your foot in the door. In a not-so-subtle shot at China, which jumped out to a big lead in the EV battery business, the U.S. government has stipulated that once the calendar year flips to 2024, the EV or PHEV you purchase won't qualify for federal EV tax credits if any battery components came from a "foreign entity of concern," a short list that includes China, Russia, Iran and North Korea. For 2025, the stipulation will extend to critical battery minerals. Here again we can expect some short-term pain for automakers as they pivot from dependence on Chinese suppliers, but the financial incentives pushing that pivot are strong.

Federal EV Tax Credit Incentive #5: Price Limits

We use the plural because it depends on the type of vehicle you're considering. If it's an SUV, van, or pickup truck, it can't cost more than $80,000 or else it's not eligible for federal EV tax credits. For all other vehicle types, the eligibility limit drops to $55,000. The point of this incentive is to stimulate production of relatively affordable EVs as opposed to ultra-luxury models.

Federal EV Tax Credit Incentive #6: Buyer Income Limits

Finally, there's the question of how much money the buyer makes. Clearly the government wants to incentivize EV purchases within the middle class, because if you file your taxes as an individual, you won't qualify for federal EV tax credits unless you have a modified gross adjusted income (MAGI) of less than $150,000. If you file as head of household, that limit increases to $225,000, while joint filers can have a combined MAGI of up to $300,000.

FAQ

: The maximum $7,500 federal EV tax credit consists of two equal parts: Battery Components and Critical Battery Minerals. In order to get the full amount, your EV or PHEV must satisfy the requirements of both parts. Your vehicle may only satisfy one part, in which case your tax credit will be $3,750. Until 2024, you'll need to claim your EV tax credit as part of your annual tax return via IRS Form 8936. From 2024 onward, the Inflation Reduction Act empowers you to transfer your EV tax credit to a qualified car dealer at the point of sale, effectively converting it into a discount on the sale price and eliminating the lag time. Learn more
: Federal EV tax credits received a massive update in the form of the Inflation Reduction Act of August 2022. This update changed the game for automakers that produce EVs, introducing many new incentives designed to shift EV production toward North America and U.S. free-trade partners more broadly, as well as make EVs more accessible to mainstream America. Within the Inflation Reduction Act, there are also numerous updates from year to year as new provisions kick in. Read our full writeup on the Inflation Reduction Act for comprehensive details. Learn more
: If you're an individual tax filer, your modified gross adjusted income (MAGI) must be less than $150,000. If you file as head of household, that limit rises to $225,000. Joint filers are permitted a combined MAGI of up to $300,000. Learn more

2022 Electric Vehicle Registrations in the U.S.

These are the 2022 electric vehicle registration share by state, as determined by Edmunds data (January 1 - August 31, 2022). Click on a state to view the top electric vehicle registrations by make.

Electric vehicle registrations

0% - 1.99%
2% - 3.99%
4% - 5.99%
6% - 7.99%
8% - 9.99%
>10%

Electric vehicle tax credits, rebates and other incentives

2023 Ford E-Transit Cargo Van

2023 Nissan LEAF

2023 Volkswagen ID.4

2023 Ford Escape

2023 Chevrolet Bolt EUV

2023 Chevrolet Bolt EV

2023 Tesla Model Y

2023 Ford F-150 Lightning

2023 Ford Mustang Mach-E

2023 Tesla Model 3

2023 Volvo XC40 Recharge Twin Pure Electric

2023 Volvo C40 Recharge Twin Pure Electric

2023 Hyundai IONIQ 5

2023 Genesis GV60

2023 Hyundai Kona Electric

2023 Subaru Solterra

Federal EV Tax Credits Overview

Federal EV Tax Credit Incentive #1: North American Final Assembly

Federal EV Tax Credit Incentive #2: Origin of Critical Battery Minerals ($3,750 Tax Credit)

Federal EV Tax Credit Incentive #3: Origin of Battery Components ($3,750 Tax Credit)

Federal EV Tax Credit Incentive #4: No Involvement by Blacklisted Countries After 2023

Federal EV Tax Credit Incentive #5: Price Limits

Federal EV Tax Credit Incentive #6: Buyer Income Limits

FAQ

How do EV tax credits work?

When are EV tax credits updated?

What is the EV tax credit income limit?

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