On August 16th, 2022, U.S. President Joe Biden signed the Inflation Reduction Act into law. The $750 billion health care, tax, and climate bill aims to curb the highest inflation rate in 40 years (inflation increased to 9.1% in June 2022). The bill also included new federal tax credits for consumers who buy electric and hybrid plug-in vehicles. Earlier this year, the Treasury Department updated the EV tax credit rules, significantly limiting what cars could qualify for a 2024 EV tax credit.

Just want a list of cars that qualify for a 2024 EV tax credit? Here you go.

Published: September 2, 2022. Updated September 8, 2023.
Disclaimer: We hope you found this post helpful! Nothing in this post constitutes professional, tax or financial advice. Please conduct your own research before transacting and consider talking to a qualified professional about your unique circumstances
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How Do Federal Tax Credits Work?

First, it’s important to clarify what a federal tax credit does. A federal tax credit does not necessarily put money in your pocket – instead, it reduces the amount you pay on your federal taxes. 

For example, let’s say you expect to pay $13,000 in federal taxes in 2022. If you qualify for a federal tax credit of $5,000, you would instead pay $8,000 in federal taxes. 

While the net result is still more money in the bank, it’s coming from paying less federal taxes – not necessarily cutting a check from Uncle Sam. 

An image of the Inflation Reduction Act 2024 tax credit bill.

How Is the New Inflation Reduction Act EV Tax Credit Different?

The Inflation Reduction Act makes quite a few changes to previously existing federal tax credit rules that you should know about. Some of the most important changes include:

  • Restricting EV and hybrid federal tax credits to North American-made vehicles, eliminating many vehicles that previously qualified for a federal tax credit.
  • Putting new price thresholds on eligible vehicles. To qualify, Sedans, hatchbacks, wagons, and other smaller cars must be $55,000 or less. Pickup trucks, SUVs, and vans are cut off at $80,000. 
  • Removing a 200,000 vehicle sales cap on tax credits starting in 2023. In other words, the new tax credit extends to eligible vehicles even if more than 200,000 are sold (starting in 2023). 
  • Offering a new tax credit of up to $4,000 on used EVs after December 31st, 2022. 
  • Restricting the full tax credit on new EVs to vehicles with battery minerals either sourced from countries the U.S. has a free trade agreement with or that are recycled in North America. In other words, cars with batteries sourced from ineligible countries may still be eligible for a federal tax credit, but not the full $7,500. The U.S. Treasury Department further updated these rules in April 2023, further limiting what new EVs can qualify for an EV tax credit.

Should I Wait to Buy A New EV Because of the Inflation Reduction Act?

These sweeping changes stand to impact many drivers. Although parts of the bill won’t go into effect until 2023, the effective date for many restrictions is August 16th, 2022 – the day it was passed into law.

The government is still working to finalize all makes and models that are (or are not) eligible for the Inflation Reduction Act 2024 EV tax credit. If you have your eye on a new EV or hybrid that currently qualifies, buying it now may be wise in case it becomes ineligible later down the line.

An image of an electric vehicle charging at a charging station.

How Do I Know If My Car Is Eligible for a 2024 EV Tax Credit?

After the Treasury Department’s updated manufacturing rules, which featured new, stricter supply chain rules for EV battery components, here are the cars that qualify for a 2024 EV tax credit:

Model Year:Vehicle:Additional Information:
2023-24Cadillac Lyriq$7,500 Credit, $80,000 MSRP Limit
2024Chevrolet Blazer$7,500 Credit, $80,000 MSRP Limit
2022-23Chevrolet Bolt EV & Bolt EUV$7,500 Credit, $55,000 MSRP Limit
2024Chevrolet Equinox$7,500 Credit, $80,000 MSRP Limit
2024Chevrolet Silverado$7,500 Credit, $80,000 MSRP Limit
2022-23Chrysler Pacifica PHEV$7,500 Credit, $80,000 MSRP Limit
2022-23Ford E-Transit$3,750 Credit, $80,000 MSRP Limit
2022-23Ford Escape Plug-In Hybrid$3,750 Credit, $80,000 MSRP Limit
2022-23Ford F-150 Lightning (Extended Range)$7,500 Credit, $80,000 MSRP Limit
2022-23Ford F-150 Lightning (Standard Range)$3,750 Credit, $80,000 MSRP Limit
2022-23Ford Mustang Mach-E (Extended Range)$3,750 Credit, $80,000 MSRP Limit
2022-23Ford Mustang Mach-E (Standard Range)$3,750 Credit, $80,000 MSRP Limit
2022-23Jeep Grand Cherokee PHEV 4xe$3,750 Credit, $80,000 MSRP Limit
2022-23Jeep Wrangler PHEV 4xe$7,500 Credit, $80,000 MSRP Limit
2022-23Lincoln Aviator Grand Touring$7,500 Credit, $80,000 MSRP Limit
2022-23Lincoln Corsair Grand Touring$3,750 Credit, $80,000 MSRP Limit
2022-23Tesla Model 3 Performance$7,500 Credit, $55,000 MSRP Limit
2022Tesla Model 3 Standard Range RWD$7,500 Credit, $55,000 MSRP Limit
2022Tesla Model Y AWD$7,500 Credit, $80,000 MSRP Limit
2022Tesla Model Y Long Range AWD$7,500 Credit, $80,000 MSRP Limit
2022Tesla Model Y Performance$7,500 Credit, $80,000 MSRP Limit
2022-23Rivian R1S$3,750 Credit, $80,000 MSRPT Limit
2022-23Rivian R1T$3,750 Credit, $80,000 MSRP Limit
2023Volkswagen ID.4 Pro
ID.4 Pro S
ID.4 Pro S Plus
ID.4 AWD Pro
ID.4 AWD Pro S
ID.4 AWD Pro S Plus
ID.4 S
ID.4 Standard
$7,500 Credit, $80,000 MSRP Limit

Before the 2024 updates, these were the vehicles that could have been eligible for a federal tax credit under the Inflation Reduction Act:

Model Year:Vehicle:
2022Audi Q5
2022BMW 330e
2022BMW X5
2022Chevrolet Bolt EUV
2022Chevrolet Bolt EV
2022Chrysler Pacifica PHEV
2022Ford Escape PHEV
2022Ford F Series
2022Ford Mustang MACH E
2022Ford Transit Van
2022GMC Hummer Pickup
2022GMC Hummer SUV
2022Jeep Grand Cherokee PHEV
2022Jeep Wrangler PHEV
2022Lincoln Aviator PHEV
2022Lincoln Corsair Plug-in
2022Lucid Air
2022Nissan Leaf
2022Rivian EDV
2022Rivian R1S
2022Rivian R1T
2022Tesla Model 3
2022Tesla Model S
2022Tesla Model X
2022Tesla Model Y
2022Volvo S60
2023BMW 330e
2023Bolt EV
2023Cadillac Lyriq
2023Mercedes EQS SUV
2023Nissan Leaf

Some of these makes and models are also constructed outside North America, making them ineligible. To see if the car you want is eligible, search the Vehicle Identification Number (VIN) on the National Highway Traffic Safety Administration (NHTSA) VIN Decoder. The VIN Decoder will let you know if final assembly occurred in the U.S. (making the car eligible) or elsewhere (making it ineligible). 

Find the NHTSA VIN Decorder Here.

An image portraying tax credits over a 100-dollar bill and Benjamin Franklin's face.

What About Cars Qualified Under the Previous EV Tax Credit Rules?

According to the U.S. Internal Revenue Service (IRS), buyers who entered a contract to purchase a previously qualified vehicle before August 16th can still claim a federal tax credit under the previous EV rules. This applies even if they could not possess the car until after August 16th (due to construction delays or delivery times). 

To take advantage of the new 2024 EV tax credit on cars purchased between August 16th, 2022, and December 31st, 2022, the final assembly must have occurred in the U.S. Otherwise, the rules in effect prior to the Inflation Reduction Act will apply. 

In the long run, the Inflation Reduction Act EV tax credit stands to increase the number of EVs made in North America and give buyers of used and new EVs a significant financial incentive to purchase an electric or hybrid car. We hope this piece has clarified the ins and outs of the Act. Stay tuned for more car news, tips, and tricks in the near future!