These EVs Qualify For Tax Credits But It’s Confusing

  • As it turns out, only ten EVs will qualify for the full $7,500 tax credit
  • Seven models are eligible for the $3,750 partial credit, while nine previously eligible models no longer qualify
  • BMW, Nissan, Genesis and Volkswagen no longer qualify for credits under new restrictions

Today, it’s all about tax credits. For those motorists hunkering after the latest news about which electric vehicles (EVs) are eligible for the $7,500 tax credit, or even the partial $3,750 credit, here are the most recent updates.

Of the EVs originally mentioned, nine previously eligible models would no longer qualify, according to a list released Monday.

In fact, as it turns out, only ten EVs will qualify for the full $7,500 credit when increasingly stringent critical mineral and battery component sourcing requirements take effect on Tuesday. Those ten include the Tesla Model 3, Chrysler Pacifica Hybrid, Toyota Prius Prime, Kia Niro, Nissan Leaf, Honda Clarity, Mitsubishi Outlander PHEV, Volvo XC90 Hybrid, Porsche Panamera E-Hybrid and Jaguar I-Pace—which is strange as only half of those cars are actually fully electric vehicles. Meanwhile, the IRS says that the following vehicles will still be eligible for both credits. They include the Cadillac Lyriq, Chevy Bolt and Silverado EV, Ford F-150 Lightning, and Tesla Model Y among others.

In contrast, seven models are eligible for the $3,750 partial credit under the tougher eligibility rules, while nine previously eligible models would no longer qualify, according to an updated list released Monday.

According to the Inflation Reduction Act introduced in 2022, motorists who meet previously determined income thresholds can receive a tax credit of up to $7,500 for North American-assembled EVs that also meet sticker price restrictions.

Beginning this week, the credit will be broken up into two parts, with $3,750 for EVs that have over 40 percent of the value of the battery’s critical minerals extracted or processed in the U.S. or in a country where the U.S. has a free-trade agreement. Then another $3,750 will be made available if at least half of the value of the EV’s battery components are made or assembled in North America.

As must be plainly obvious by now, the Biden Administration’s aim is to use the two taxes to incentivize automakers and their battery partners to continue ramping up U.S. production and keep manufacturing in the U.S.

In Q1 of 2023, nearly 65 percent of EV sales qualified for the credit under the North American assembly and sticker price requirements. More than 90 percent of those previously eligible first-quarter sales remain eligible under the EV battery sourcing requirements, the analysis found.

“Given the constraints of the legislation,” said John Bozzella, CEO of the Alliance for Automotive Innovation, “Treasury’s done as well as expected to produce rules that meet the statute and reflect the current market. March this year is as good as it’s going to get.”

International automakers like BMW, Nissan, Genesis and Volkswagen had all previously qualified for the tax credit, but none of their vehicles now qualify under the new restrictions. In contrast, Nissan and Hyundai have plans to manufacture EVs in the U.S., with the end goal being to create models that qualify for at least a partial credit.

Rivian’s electric pickups — R1S and R1T — were also deleted from the list of qualifying vehicles most probably due to their cost and parts issues.

It is unclear how the number of eligible vehicles might be further slashed next year when the EV battery sourcing rules toughen and additional exclusions take effect.


Even though the eligibility clauses are still confusing, leaving many potential EV buyers confused or in the dark, at least we now have a definitive list of those EVs that are eligible and those which are not. Starting in 2024, vehicles are ineligible if they contain any battery components that are manufactured by a “foreign entity of concern,” which could well include companies controlled by China.

More Articles for You

Mercedes-Benz C350e PHEV Launched In Malaysia As CKD Model

The highly anticipated C350e Plug-in Hybrid, which offers an all-electric range of up to 117 km (WLTP driving cycle), has …

First Country In SEA To Get Jaecoo J7 Will Be Malaysia

Officially previewed earlier this year, the Jaecoo J7 is slated to land in Malaysian showrooms in the first half of …

Toyota Prius 24h Le Mans Special Goes On Display In Malaysia

So this week the Toyota Prius 24h Le Mans Centennial GR Edition is on display at the Toyota Beyond Zero …

Toyota Alphard Hybrid Destined For Malaysian Showrooms In 2024

Toyota’s inimitable Alphard SUV is on the verge of finally being introduced into Malaysia. But exactly when we are not …

BYD Seal U SUV Launching In Malaysia From RM215,000

Beginning with a major expansion of its European portfolio, BYD is in the throes of debuting its all-new BYD SEAL …

New Range Rover Facelift Evoque Debuts In Malaysia

SUV diehards may have trouble telling the new facelifted Range Rover Evoque and the outgoing version apart. Yes, the revisions …