You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
The new rules are complicated. Here’s how to make sense of them if you’re shopping for an electric vehicle.
The Department of Treasury published new rules last year that will determine which new electric vehicles, purchased for personal use, will qualify for a $7,500 tax credit. They went into effect on April 18, 2023, and last for the next decade or so.
These new tax credit rules are complicated. The list of cars that qualify for the new tax credit can change from year to year — and even month to month. Many buyers in the EV market might have a few questions, including: Should I buy that new car now, or should I wait? Which cars qualify for the current tax credit, and which ones will earn the new one?
This is Heatmap’s guide to the new tax credit, why it matters, and what to keep in mind as you go EV shopping.
If you’re an ordinary American buying a brand-new EV to run errands and pick up the kids, these new rules apply to you. They will determine which cars you can get a federally funded discount on.
If you’re not buying a new car for personal use — because you’re getting it for your business, say, or because you’re buying a used EV — these new rules don’t apply to you. But you may qualify for other new subsidies. We get into those below.
And even if you are in that first category, you may discover it’s much cheaper to lease a new EV instead of buying it outright. We get into why below, too.
They completely change how the United States approaches the EV industry.
During the Bush and Obama administrations, the U.S. was focused mostly on getting automakers to begin to experiment with EVs. So it discounted the first 200,000 or so electric vehicles that each manufacturer sold by up to $7,500. If a company had cumulatively sold more than that number over time, as Tesla and General Motors eventually did, then the discount expired. By 2022, that had led to a peculiar situation where foreign automakers, such as Hyundai, could use the subsidy, while some of the largest American automakers couldn’t.
Now, U.S. policy is focused on two goals: (1) building up a domestic supply chain for EVs and (2) getting more EVs on the road. So the tax break is completely uncapped — any automaker can use it as many times as possible if they meet the criteria.
But many new requirements apply: Only cars that undergo final assembly in North America will qualify for any of the tax credit. Then, cars with a battery that was more than 50% made in North America will qualify for a $3,750 subsidy. And cars where at least 40% of the “critical minerals” used come from the U.S. or a country with whom we have a free-trade agreement will qualify for another $3,750 subsidy.
Those percentage-based requirements will ramp up over time. By 2029, for instance, 100% of a car’s battery and battery components must be made in North America.
Because Congress said so. The Inflation Reduction Act, which Democratic majorities in the House and Senate passed last year, mandated this change to the EV tax credit as part of its broad expansion of American climate policy.
Initially, fewer EVs will receive a subsidy under the new rules, Biden officials say. On a press call with reporters, a senior Treasury official argued that more cars will eventually qualify under the new rules than qualified under the old ones.
This year, at least 15 car or light trucks will receive some or all of the credit. Only some of those vehicles will qualify for the full $7,500 tax credit; some will qualify for a partial $3,750 tax credit. Here is the full list of qualifying models, along with the amount of the tax credit that they will earn:
• Audi Q5 TFSI e Quattro PHEV ($3,750)
• Cadillac LYRIQ ($7,500)
• Chevrolet Bolt ($7,500)
• Chevrolet Bolt EUV ($7,500)
• Chrysler Pacifica PHEV ($7,500)
• Ford Escape Plug-in Hybrid ($3,750)
• Ford F-150 Lightning, Standard & Extended Range ($7,500)
• Jeep Wrangler PHEV 4xe ($3,750)
• Jeep Grand Cherokee PHEV 4xe ($3,750)
• Lincoln Corsair Grand Touring ($3,750)
• Rivian R1S, Dual Large & Quad Large ($3,750)
• Rivian R1T, Dual Large, Dual Max, & Quad Large ($3,750)
• Tesla Model X Long Range ($7,500)
• Tesla Model 3 Performance ($7,500)
• Tesla Model 3 Long Range AWD ($3,500)
• Tesla Model Y AWD, Rear-Wheel Drive, & Performance ($7,500)
• Volkswagen ID.4 AWD PRO, PRO, S, & Standard ($7,500)
Some vehicles that earned the full tax credit in 2023, such as the Ford Mustang Mach E, don’t qualify for any benefit as of January 2, 2024.
Yes. A few examples: The Hummer EV, which costs more than $110,000 a piece, won’t qualify for either the new or old tax credit — it’s too expensive. And the Polestar 2 won’t qualify because it’s assembled in China.
Yes. Starting this year, the U.S. is preventing cars that receive too much manufacturing input from a “foreign entity of concern” — that is, China — from qualifying for anyof the tax credit. This has reduced the number of vehicles that qualify for the $7,500 bonus.
This year, the government will also allow buyers to refund their EV tax credit at the dealership. That means buyers can now get up to a $7,500 discount at the moment when they buy their car instead of waiting until they file their taxes in the following year.
Yes. A married couple must have an adjusted gross income of less than $300,000 a year, and a single filer must have an AGI of less than $150,000 a year, to qualify for any aspect of the subsidy. A head-of-household must have an income of less than $225,000 a year.
Yes. Under the proposed rule, cars must have an MSRP below $55,000 to qualify for the credit. Vans, pickup trucks, and SUVs must have an MSRP below $80,000.
Yes. The Inflation Reduction Act also included a new $7,500 tax credit for EVs used for any commercial purpose. The Treasury Department is expected to interpret that provision to cover leasing, but it hasn’t announced the guidelines for that rule yet, so we don’t know for sure.
But the provision will probably tilt new EV drivers toward leasing their car rather than buying it outright, because the dealer should — emphasis on should — offer relative discounts on leasing vehicles as compared to buying them.
Yes. There’s also a new $4,000 tax credit for buying a used EV that costs $25,000 or less. It went into effect on January 1, 2023, so you can go ahead and use it today.
But note that it has even stricter income limits: Married couples can only take advantage of it if they make $150,000 or less, and other filers if they make $75,000 or less.
Here’s the list of cars that qualified for the $7,500 tax credit before April 18, 2023, according to the Department of Energy.
• Audi Q5 TFSI e Quattro (PHEV)
• BMW 330e *
• BMW X5 xDrive45e**
• Cadillac Lyriq
• Chevrolet Bolt
• Chevrolet Bolt EUV
• Chevrolet Silverado EV
• Chrysler Pacifica PHEV
• Ford E-Transit
• Ford Escape Plug-In Hybrid *
• Ford F-150 Lightning
• Ford Mustang Mach-E
• Genesis Electrified GV70
• Jeep Grand Cherokee 4xe
• Jeep Wrangler 4xe
• Lincoln Aviator Grand Touring *
• Lincoln Corsair Grand Touring *
• Nissan Leaf
• Nissan Leaf (S, SL, SV, and Plus models)
• Rivian R1S
• Rivian R1T
• Tesla Model 3 Long Range
• Tesla Model 3 Performance
• Tesla Model 3 RWD
• Tesla Model Y All-Wheel Drive
• Tesla Model Y Long Range
• Tesla Model Y Performance
• Volkswagen ID.4
• Volkswagen ID.4 AWD, Pro, and S models
• Volvo S60 PHEV *
• Volvo S60 Extended Range
• Volvo S60 T8 Recharge (Extended Range)
* These cars don’t qualify for the full $7,500 subsidy, although they all receive at least a $5,400 tax credit.
** Only some BMW X5 xDrive45e vehicles qualify — it depends where the car was made. Check the VIN or ask the dealership to confirm it was made in North America before buying.
This story was originally published on March 31, 2023. It was last updated on March 5, 2024, at 10:00 a.m. ET.
Get the best of Heatmap delivered to your inbox:
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
And more of this week’s top renewable energy fights across the country.
1. Otsego County, Michigan – The Mitten State is proving just how hard it can be to build a solar project in wooded areas. Especially once Fox News gets involved.
2. Atlantic County, New Jersey – Opponents of offshore wind in Atlantic City are trying to undo an ordinance allowing construction of transmission cables that would connect the Atlantic Shores offshore wind project to the grid.
3. Benton County, Washington – Sorry Scout Clean Energy, but the Yakima Nation is coming for Horse Heaven.
Here’s what else we’re watching right now…
In Connecticut, officials have withdrawn from Vineyard Wind 2 — leading to the project being indefinitely shelved.
In Indiana, Invenergy just got a rejection from Marshall County for special use of agricultural lands.
In Kansas, residents in Dickinson County are filing legal action against county commissioners who approved Enel’s Hope Ridge wind project.
In Kentucky, a solar project was actually approved for once – this time for the East Kentucky Power Cooperative.
In North Carolina, Davidson County is getting a solar moratorium.
In Pennsylvania, the town of Unity rejected a solar project. Elsewhere in the state, the developer of the Newton 1 solar project is appealing their denial.
In South Carolina, a state appeals court has upheld the rejection of a 2,300 acre solar project proposed by Coastal Pine Solar.
In Washington State, Yakima County looks like it’ll keep its solar moratorium in place.
And more of this week’s top policy news around renewables.
1. Trump’s Big Promise – Our nation’s incoming president is now saying he’ll ban all wind projects on Day 1, an expansion of his previous promise to stop only offshore wind.
2. The Big Nuclear Lawsuit – Texas and Utah are suing to kill the Nuclear Regulatory Commission’s authority to license small modular reactors.
3. Biden’s parting words – The Biden administration has finished its long-awaited guidance for the IRA’s tech-neutral electricity credit (which barely changed) and hydrogen production credit.
A conversation with J. Timmons Roberts, executive director of Brown University’s Climate Social Science Network
This week’s interview is with Brown University professor J. Timmons Roberts. Those of you familiar with the fight over offshore wind may not know Roberts by name, but you’re definitely familiar with his work: He and his students have spearheaded some of the most impactful research conducted on anti-offshore wind opposition networks. This work is a must-read for anyone who wants to best understand how the anti-renewables movement functions and why it may be difficult to stop it from winning out.
So with Trump 2.0 on the verge of banning offshore wind outright, I decided to ask Roberts what he thinks developers should be paying attention to at this moment. The following interview has been lightly edited for clarity.
Is the anti-renewables movement a political force the country needs to reckon with?
Absolutely. In my opinion it’s been unfortunate for the environmental groups, the wind development, the government officials, climate scientists – they’ve been unwilling to engage directly with those groups. They want to keep a very positive message talking about the great things that come with wind and solar. And they’ve really left the field open as a result.
I think that as these claims sit there unrefuted and naive people – I don’t mean naive in a negative sense but people who don’t know much about this issue – are only hearing the negative spin about renewables. It’s a big problem.
When you say renewables developers aren’t interacting here – are you telling me the wind industry is just letting these people run roughshod?
I’ve seen no direct refutation in those anti-wind Facebook groups, and there’s very few environmentalists or others. People are quite afraid to go in there.
But even just generally. This vast network you’ve tracked – have you seen a similar kind of counter mobilization on the part of those who want to build these wind farms offshore?
There’s some mobilization. There’s something called the New England for Offshore Wind coalition. There’s some university programs. There’s some other oceanographic groups, things like that.
My observation is that they’re mostly staff organizations and they’re very cautious. They’re trying to work as a coalition. And they’re going as slow as their most cautious member.
As someone who has researched these networks, what are you watching for in the coming year? Under the first year of Trump 2.0?
Yeah I mean, channeling my optimistic and Midwestern dad, my thought is that there may be an overstepping by the Trump administration and by some of these activists. The lack of viable alternative pathways forward and almost anti-climate approaches these groups are now a part of can backfire for them. Folks may say, why would I want to be supportive of your group if you’re basically undermining everything I believe in?
What do you think developers should know about the research you have done into these networks?
I think it's important for deciding bodies and the public, the media and so on, to know who they’re hearing when they hear voices at a public hearing or in a congressional field hearing. Who are the people representing? Whose voice are they advancing?
It’s important for these actors that want to advance action on climate change and renewables to know what strategies and the tactics are being used and also know about the connections.
One of the things you pointed out in your research is that, yes, there are dark money groups involved in this movement and there are outside figures involved, but a lot of this sometimes is just one person posts something to the internet and then another person posts something to the internet.
Does that make things harder when it comes to addressing the anti-renewables movement?
Absolutely. Social media’s really been devastating for developing science and informed, rational public policymaking. It’s so easy to create a conspiracy and false information and very slanted, partial information to shoot holes at something as big as getting us off of fossil fuels.
Our position has developed as we understand that indeed these are not just astro-turf groups created by some far away corporation but there are legitimate concerns – like fishing, where most of it is based on certainty – and then there are these sensationalized claims that drive fears. That fear is real. And it’s unfortunate.
Anything else you’d really like to tell our readers?
I didn’t really choose this topic. I feel like it really got me. It was me and four students sitting in my conference room down the hall and I said, have you heard about this group that just started here in Rhode Island that’s making these claims we should investigate? And students were super excited about it and have really been the leaders.