Only A Handful of EVs Will Qualify For 2024’s Federal Tax Credit
The list of eligible EVs will shrink in the coming year — but it’s not all bad news for consumers.
The list of electric vehicles that qualify for federal tax credits will shrink in 2024. Beginning January 1, the tax credits — which give qualifying EV buyers up to $7,500 off the purchase of an electric vehicle or hybrid plug-in — will include new restrictions on manufacturers’ suggested retail pricing and where automakers can source their materials, according to reporting from The Street.
The Biden administration’s new rules will require EV manufacturers to source more battery components and other raw materials in North America, in order for their vehicles to be eligible for the full EV tax credit. If the materials are sourced from any country with a free-trade agreement in place, the EVs will be eligible for half the rebate — $3,750.
At present, only 10 EVs — including three Tesla models — will qualify for the full $7,500 credit in 2024. Two other Tesla models will no longer qualify for the full credit, per previous reporting from Fatherly.
EVs that qualify for the full tax credit in 2024
- Chevrolet Bolt EV
- Chevrolet Equinox EV
- Ford F-150 Lightning
- Tesla Model 3 Performance
- Chevrolet Silverado
- Tesla Model Y Performance
- Chrysler Pacifica PHEV
- Chevrolet Blazer EV
- Cadillac LYRIQ
- Tesla Model X
But it isn’t all bad news. Beginning in 2024, consumers will no longer have to wait to apply their EV credit at tax time — the federal rebate will be available at the point of purchase, instantly shaving thousands of dollars off the price of a new car. And other EV tax credit loopholes still abound (if one of the EVs you want isn’t on the 2024 list, you can still take advantage of the tax credit through leasing.)
Many states will offer EV tax credits in 2024
Though fewer EVs will qualify for the federal tax credit in 2024, many states will be offering their own incentives. Certain drivers in Colorado will qualify for an additional $6,000 credit if they trade in an older gas-powered car and make under a certain income threshold, for example.
And, according to the Tax Foundation, nearly half of states offer additional tax credits that tally up to $7,500. Taken all together — the federal and state credits, existing discounts, and any lease agreements — the price of many EVs on the market will be similar to that of many gas-powered vehicles for the coming year.
The trending affordability of electric vehicles is likely to continue. Successive price cuts at Tesla have led the cars to basically no longer be priced like luxury vehicles.
For the most up-to-date details on which vehicles qualify for the EV tax credit, visit the FuelEconomy.gov website.
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