Every Vehicle That Qualifies For The Full EV Tax Credit In 2024
The EV Tax Credit is both enticing and confusing at the same time. The government didn't make understanding the credit any easier with its new rules that went into effect on January 1st, 2024. The new rules restrict what cars are eligible for the tax credit based on battery sourcing and total MSRP. In addition, the regulations restrict buyers' eligibility based on their income. It's worth trying to get if you're buying an EV or plug-in hybrid, though, because buyers can transfer the tax credit to their respective dealership for an immediate $7,500 discount on the price of their vehicle if they qualify for the entire tax credit. That said, it can be a bit scary because if you take the tax credit and don't qualify, you'll have to pay it back when you file your taxes the following year.
Currently, the IRS restrictions for qualifying for the tax credit state that single filers can not exceed $150,000 of income. Head of household filers may not exceed $225,000, and jointly-filing married couples may not exceed $300,000. In addition, when shopping for used vehicles, those restrictions are $75,000, $112,500, and $150,000, respectively. Of course, the best thing to do is ensure you're qualified with your dealer. With that in mind, here are all the vehicles that currently qualify for the full $7,500 credit.
Cadillac Lyriq
First up is the Cadillac Lyric. Before we dig into the Lyriq, it's worth noting that the MSRP restriction for qualifying for the tax credit is dependent on the vehicle type. Trucks and SUVs get a higher MSRP limit at $80,000, while other passenger vehicles are restricted to a $55,000 MSRP. This includes any options or packages. The Lyriq, being an SUV, qualifies for the higher restriction. That's great because they start at $58,590. Moving up to the most expensive variant, the AWD Sport model, the MSRP can easily slide north of $70,000 with options.
The Lyriq in both rear-wheel-drive and all-wheel-drive format has an EPA estimated range of over 300 miles. In addition, its DC fast charging capability allows for up to 77 miles in range in just 10 minutes of charging. AWD models have 500 horsepower, so they're certainly punchy. Of course, combining all these EV traits with legendary Cadillac Luxury sounds pretty promising. A $7,500 discount really is the cherry on top.
With this model and the rest on this list, due diligence is important. Not every trim or option necessarily keeps the tax credit qualification. So, buyers should consult with their dealerships to verify eligibility.
Chevrolet Bolt and Bolt EUV
The Chevrolet Bolt is the cheapest new EV on the market right now. So, there's no problem keeping it under the MSRP restriction of $55,000 all in. The starting price of the standard Chevy Bolt is just $26,500. The larger Bolt EUV doesn't qualify as an SUV, either, but it also has a starting MSRP of $27,800. So, they both fall well under the MSRP restriction.
Both the Bolt and Bolt EUV have an EPA range estimate just south of 250 miles on a full charge. Though that range might cause a bit of a struggle on a cross-country trek, it's more than reasonable for most folks day to day use. For those looking to get into a brand-new EV without breaking the bank, it's a phenomenal option. Especially when you consider the fact that it qualifies for the full $7,500 EV tax credit.
Of course, the fire issues that Bolt and Bolt EUV models faced in recent history do leave a bit of a stain on the name. However, Chevrolet issued a recall to replace all of the affected Bolt's batteries and revised the battery for future models. Thus far, it seems that the battery fix has taken care of the problem. Still, we don't blame you for being a little hesitant to buy a car that historically has burst into flames and burned to the ground.
Chrysler Pacifica PHEV
Yes, plug-in hybrid vehicles can indeed qualify for the full $7,500 tax credit. The Chrysler Pacifica falls under the $80,000 restricted MSRP category. So, with its starting MSRP of $53,620, there's a good bit of wiggle room for options and packages. With a full tank of gas onboard, Chrysler says the 2024 Pacifica PEHV can trek 520 miles when combined with the electric motor. On the battery only, it can cruise up to 32 miles. General runabout like taking kids to school or the grocery store could use no gas at all, which is a plus.
If you're looking for a tax-credit-eligible vehicle for the whole family, the Chrysler Pacifica is hard to argue against. With luxurious interior options like leather and DVD screens as well as expansive cargo and stowing capacities for road trips, it makes a phenomenal ride for those hauling kids around. It's worth noting, though, that the more luxurious features are reserved for the higher-end "Pinnacle" trim level.
Ford F-150 Lightning
Ford's electric pickup truck, the Lightning, has certainly made plenty of headlines for better or for worse. It has fallen under harsh criticism for its drastic battery performance reduction when towing or in cold weather. That said, the Lightning is still a feasible pickup truck option for many buyers who just trek around town with the occasional need for a pickup truck bed. Let's be honest, a huge amount of truck owners rarely use their trucks for truck things anyway.
Being that the Lightning is a pickup truck, the $80,000 MSRP limit is in play. With a starting MSRP of $49,995, the Lightning also has quite a bit of wiggle room for up-trimming and options. The Lightning has a bunch of cool features like charge scheduling to prevent overrunning your electric bill and an incredible amount of cargo space up front. It also has a sub-four-second zero to 60 time and an EPA-estimated 320 miles of range depending on the model.
If you step up to the highest trim level of the F-150 Lightning, though, the tax credit goes out the window courtesy of its starting MSRP of $91,995. The second highest trim level is the Lariat with a starting MSRP of $69,995, so it can qualify for the credit with some options.
Tesla Model 3, Model Y, and Model X
The Tesla Model X being included may be a bit surprising, but it's by no accident. The standard Dual Motor All-Wheel Drive variant of the Model X very conveniently has an MSRP of $79,990, squeaking under the MSRP restriction by $10. It is pretty cool, though, that you can get the biggest and most family-friendly Tesla with the tax credit.
If the Model X is outside your budget, though, the Model 3 and Model Y both qualify for the tax credit. The Model 3 is restricted to the $55,000 MSRP limit. However, with a starting MSRP of $38,990, it's well within the limit. Moving up to the Model 3 Long Range slides the MSRP up to $47,740.
The Model Y has a starting MSRP of $43,990 with the Long Range upgrade bringing it up to $48,990. Stepping up to the performance model lands a starting MSRP of $52,490. So, even the brutal accelerating top trim model qualifies for the tax credit.
Volkswagen ID.4
The EPA list cites an unprecedented eight different trim levels of the ID.4 that qualify for the full $7,500 tax credit. Though the ID.4 is fairly small, it qualifies as an SUV, so it's subject to the higher $80,000 MSRP restriction. The starting price for an ID.4 is $38,995 and it has a respectable EPA estimated range of 275 miles. They also come with three years of included DC fast charging on the Electrify America network in 30-minute intervals.
The most expensive variant of the ID.4 is the AWD Pro S Plus model with its starting MSRP of $55,245. The top-trim model features amenities like heated rear seats, power-folding mirrors, 20-inch wheels, and a zero to 60 sprint in 5.8 seconds. However, the AWD models drop the range to 255 miles. The same creature comforts are available with the Pro S Plus non-all-wheel drive model without detracting from the 275-mile range.
Given the fluctuating changes to restrictions and requirements, it's best to keep an eye on the EPA list of qualifying vehicles before you buy. One last reminder, too, you should consult with your dealer to see if the car you're after qualifies for the full tax credit. In addition, some vehicles, both new and used, qualify for a reduced credit of $3,750. So do your due diligence before shopping!