The 2025 EV Tax Credit: You Can Still Save Big on These Vehicles

The tax benefits of the federal government in the amount of $ 7,500 for the purchase of electric vehicles were never easier. But let’s turn to the elephant in the room: there is a lot of uncertainty about whether President Donald Trump (or will be) can forever cancel these credits.

“Now he is still active,” said Peter Glenn, the founder and co-director of EV Life, the EV financial platform. “This will take an act of Congress, not an executive order” to withdraw it.

Although this lasts, the EV discount is significant, but applies only to electric cars that meet certain requirements, mainly around the source and production of battery materials.

The list of suitable electric vehicles also slightly reduced at the beginning of 2025, since the requirements became more stringent. But experts are optimistic that the list of vehicles will grow when American automakers are gaining more cars and batteries.

“I expect it [list] It will increase over time, ”said Kate Whitfut, an assistant professor of engineering and state policy at the University of Carnegie -Mellon. This is because for automakers it will take time to create chains of internal batteries and minerals necessary to satisfy the requirements of tax benefits – – which are still relatively new, she said.

Some experts believe that you should not wait until the list is growing. If you want EV right now, there is no need to wait for more than the qualification of more vehicles, Glenn said. “The electric car is similar to a savings account on wheels,” he said, and the economy is already good for buyers in the market right now.

So, how do you find out which electric cars have the right to a loan and which are not?

Fortunately, the government has a running list that we break below you below. But it is still important to understand “why” behind the rules. Here is a brief presentation of how the tax loan works and what to expect.

How does the tax credit work EV

Until 2023, the EV tax loan worked, like most others: you will purchase EV at the full price, and then you have an application for a loan of 7,500 US dollars after a fact and get a discount on taxes. This meant that customers had to be ready to raise the full price of an electric car and get a discount a few months later.

But thanks to the change in the rule in 2024, the participating car dealers can now apply a discount at the point of sale, which means that the client sees a decrease in the price of the sticker, and you do not need to submit documents later.

New electric cars can apply for a loan of $ 7,500, while used cars can apply for a similar tax loan up to $ 4,000.

These electric cars are entitled to federal tax credit right now

The qualification rules became more strict in 2025, so the list of acceptable electric vehicles has become less. Federal rules dictate several key thresholds that EV should meet to get a loan. Some of them are typical restrictions on income and prices, but others belong to where the batteries EV are produced and where the materials come from.

Here is the most current list of qualification electric vehicles for purchases made after January 1, 2025 and until January 1, 2026.

*Source: Fueleconomy.gov; Data exactly as of February 6, 2025.

2025 EV Tax loans requirements

Why do all EV have no right to tax credit?

The idea of ​​these requirements is twice: to make sure that loans go to people who they need and stimulate the internal production of electric vehicles.

MSRP

The tax loan has two restrictions on the proposed retail price of the manufacturer, in fact, the price of a car sticker. The limit is 80,000 US dollars for wagons, sports cars and pickups and 55,000 US dollars for all other electric vehicles. To get a tax loan, the total price of the vehicle should be less than these thresholds.

Critical minerals and component of the battery

This is where the requirements become complex. To get the right to a loan, at least 60% of “critical minerals” in the EV battery must have been extracted or processed in the USA or in the country that has an agreement on free trade with the United States. And at least 60% of the components of the Battery EV should be made or assembled in the USA or in the country with an agreement on free trade with the United States.

Limits of income

Credit is available only for those who make less than a certain amount in the “adjusted gross income”. For married couples, the limit is $ 300,000 a year. For household managers, the restriction is $ 225,000. And for all other limits, it is $ 150,000 in the annual income.

The location of the assembly

Any electric cars that are entitled to a federal discount must “go through the final meeting” in North America (USA, Mexico or Canada).

How will Trump’s policy affect the EV tax credit?

Despite the impression created by many executive orders of Trump, the EV tax loan is part of the law on reducing inflation, which was created as a result of the Congress act and would demand the abolition of the Congress act.

Glenn says that the Trump administration, most likely, will try to force Congress to eliminate the EV tax loan, but now it is still in place.

Although Trump was antagonist in relation to EVS, it is worth noting who benefits from the EV tax loan. On the one hand: Tesla Tesla ally Trump Elon Musk, who has the largest number of models of any brand that has the right to discount. “Telsa wins more than any other automaker,” Glenn said.

How to apply for a tax loan EV in 2024

Since dealerships can now offer a tax loan as a discount at the price of the stickers, after buying a car there are not many steps.

Here’s what you need to know before buying if you want to use the 2025 tax credit.

• Not all dealerships offer an instant tax loan in advance. Be sure to check with them before buying, said Whitefut.
• According to Fueleconomy.gov, an official government source of information about fuel saving, your car dealership must confirm that your specific EV model corresponds to a tax loan and is responsible for providing you with an IRS sale time report.
• Check twice that your income falls below the limits – because the dealership will not check you. “There are some conditions there. The dealer can give you this, but the client really must understand, ”Glenn said. Otherwise, IRS can return the tax loan if you are exceeding the income limit.
• Do not forget about EV discounts at the state level that can be folded on top of the federal loan. Consult in the energy department of your state to obtain detailed information.