Quick Facts About Federal Incentives for Electric Cars
- The Inflation Reduction Act tax credits on select new electric cars (EVs), plug-in hybrids (PHEVs), and hydrogen-powered vehicles (FCEVs) expire on September 30.
- New buyers can qualify for $7,500, and used, up to $4,000.
- Until it ends, many dealerships offer the tax credit instantly to qualifying customers and vehicles.
Consumers considering a new electric vehicle or plug-in hybrid can obtain tax credits of $7,500 on select models, but only until September 30, 2025. Income guidelines apply to the shorter list of models that qualify. So, read on to find out if federal tax incentives will help you defray the cost of buying a zero-emission vehicle when combined with state and local rebates before the deadline.
- How the EV Tax Credits Work
- The List of Electric Vehicles That Qualify
- State and Local Incentives Near You
- Your Electric Utility May Help
How the EV Tax Credits Work
The federal tax credit for new and used electric cars, plug-in hybrids, and hydrogen-powered vehicles expires on September 30. The credit is nonrefundable and can lower taxpayers’ costs of ownership if they meet income qualifications and the vehicle is on the IRS list of qualifying cars.
According to Kelley Blue Book research, electric car buyers spent an average of $56,910 in June 2025 (the most recent figures as of this writing), about 2.8% less than a year ago. The industrywide average price, including gas-powered vehicles and electric cars, was $48,907, 1.2% more than last year.
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Here’s how the EV, PHEV, and FCEV tax credits work until they expire September 30, 2025:
- Discount upfront. Dealerships can offer instant point-of-sale discounts on eligible vehicles to qualifying customers, who can use the credit as down payments at the time of purchase. According to IRS regulations, tax credits must be initiated and approved at the time of sale. The regulations also say that buyers must obtain a copy of the IRS’s confirmation that the dealer successfully submitted a “time of sale” report. Read more about IRS Publication 5900. See the full list below.
- Credits of $7,500. The Inflation Reduction Act allows a $7,500 tax credit for select new electric cars, plug-in hybrids, and hydrogen-powered vehicles that meet government qualifications. The federal government continues to update the list of qualifying vehicles until the credits expire. This year, only the full credit is available. A tax credit of $3,750 was previously available to some models, mostly plug-in hybrids.
- Caps EV price tags. The incentives restrict qualifying vehicles to low-emission trucks, SUVs, and vans with manufacturers’ suggested retail prices (MSRPs) of up to $80,000 and cars up to $55,000.
- New electric vehicle income caps. Income qualifications will remain unchanged until they expire in 2025. The rebates are limited to individuals reporting adjusted gross incomes of $150,000 or less on taxes, $225,000 for those filing as head of household, and $300,000 for joint filers.
| IRS Tax Filing Status | Adjusted Gross Income Limits |
| Single | $150,000 |
| Head of household | $225,000 |
| Married and filing jointly | $300,000 |
| Married and filing separately | $150,000 |
- Used EV rebate. Anyone considering a used electric car under $25,000 could obtain up to a $4,000 tax credit, subject to income and other limits. The IRS says the credit equals 30% of the sale price up to a maximum credit of $4,000. To qualify, used cars must be at least two model years old. The vehicle also must be purchased at a dealership. The vehicle also only qualifies once in its lifetime. Purchasers of used vehicles can only qualify for one credit every three years, and to qualify, individuals must meet income requirements (see below). Read about used EV tax credits: Used Electric Car Tax Credits Explained.
| IRS Tax Filing Status | Adjusted Gross Income Limits |
| Single | $75,000 |
| Head of household | $112,500 |
| Married and filing jointly | $150,000 |
| Married and filing separately | $75,000 |
- Leased vehicles may qualify. The IRS lets dealers claim credits of up to $7,500 on cars available for lease. Dealers, in turn, can apply that amount to the price of the vehicle before setting lease terms, effectively lowering the cost to shoppers.
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The List of Electric Vehicles That Qualify
The U.S. Internal Revenue Service released its latest list of qualifying vehicles to account for new 2026 models. As the IRS updates the list of qualifying vehicles, we will update our list until the tax credits expire.
| Vehicle | Tax Rebate Amount Today | MSRP Limit |
| 2024-2025 Acura ZDX | $7,500 | $80,000 |
| 2024-2026 Cadillac Lyriq (Luxury and Sport models) | $7,500 | $80,000 |
2026 Cadillac Optiq | $7,500 | $80,000 |
2026 Cadillac Vistiq | $7,500 | $80,000 |
| 2024-2026 Chevrolet Blazer EV (LT, RS, and SS models) | $7,500 | $80,000 |
| 2024-2026 Chevrolet Equinox EV (LT and RS models) | $7,500 | $80,000 |
| 2025-2026 Silverado EV (LT model) | $7,500 | $80,000 |
| 2024-2025 Chrysler Pacifica Plug-in Hybrid (PHEV) | $7,500 | $80,000 |
| 2024-2025 Ford F-150 Lightning (XLT, Flash, and Lariat trims) | $7,500 | $80,000 |
| 2026 Genesis Electrified GV70 | $7,500 | $80,000 |
| 2026 GMC Sierra EV | $7,500 | $80,000 |
| 2024-2025 Honda Prologue | $7,500 | $80,000 |
| 2025 Hyundai Ioniq 5 | $7,500 | $80,000 |
| 2026 Hyundai Ioniq 9 | $7,500 | $80,000 |
| 2025 Jeep Wagoneer S | $7,500 | $80,000 |
| 2025 Kia EV6 | $7,500 | $80,000 |
| 2026 Kia EV9 | $7,500 | $80,000 |
| 2025 Tesla Cybertruck (Dual and Single Motor) | $7,500 | $80,000 |
| 2025 Tesla Model 3 Long-Range All-Wheel Drive | $7,500 | $55,000 |
| 2025 Tesla Model 3 Long-Range Rear-Wheel Drive | $7,500 | $55,000 |
| 2025 Tesla Model 3 Performance | $7,500 | $55,000 |
| 2025 Tesla Model X All-Wheel Drive | $7,500 | $80,000 |
| 2025-2026 Tesla Model Y Long Range All-Wheel Drive | $7,500 | $80,000 |
| 2025-2026 Tesla Model Y Long Range Rear-Wheel Drive | $7,500 | $80,000 |
| 2025 Tesla Model Y Performance | $7,500 | $80,000 |
MORE: Electric Car Companies Guide
State and Local Incentives Near You
Some states and local governments offer incentive programs to help new car buyers afford something more efficient. These can be tax credits, rebates, reduced vehicle taxes, single-occupant carpool-lane access stickers, and registration or inspection fee exemptions.
States like California and Connecticut offer broad support for electric vehicle buyers. However, Idaho and Kentucky do not offer support to individual EV buyers.
Your Electric Utility May Help
It’s not just governments that can help you with the cost of a new EV. Some local electric utilities provide incentive programs to help buyers get into electric vehicles. After all, they’re among the ones that benefit when you turn your fuel dollars into electricity dollars.
Some offer rebates on cars. Others offer discounts on chargers or install them for free when you sign up for off-peak charging programs.
For example, Rhode Island offers up to $1,500 to residents who purchase or lease a qualified new battery electric vehicle. The state also rebates up to $1,500 more to purchasers who qualify based on income eligibility. The PowerUpRI program offers residents up to $1,000 incentives to join the state’s charging infrastructure by adding a charger in their homes. The amount varies based on income qualifications and the need for updated wiring.
MORE: Leasing vs. Buying an Electric Car in 2025
Editor’s Note: This article has been updated since its initial publication.
