Federal incentives for electric vehicles (EVs) will see big changes in 2024, affecting some EVs significantly while leaving others untouched. Here’s a breakdown:

Reduced eligibility for some:

  • Battery sourcing restrictions: Starting January 1st, 2024, the Inflation Reduction Act (IRA) imposes stricter battery sourcing requirements. EVs using components from “foreign entities of concern” (mainly China) will lose the full $7,500 tax credit. This could significantly impact many models, potentially dropping the number of eligible vehicles from 103 in 2023 to just 10 in 2024.

Positive impacts for others:

  • Point-of-sale option: Starting in 2024, consumers can claim the tax credit directly at the dealership, making it easier for those with no tax liability to benefit.
  • Increased used EV credit: The credit for used EVs will be raised to $4,000 in 2024, potentially making them more affordable and accessible.

Specific affected EVs:

Please note that the IRS guidance is often unclear so it’s best to verify before making any purchasing decisions.

  • Losers – EVs that might lose their current eligibility in 2024:
    • Ford Mustang Mach-E
    • Nissan Leaf
    • Tesla Model 3 (RWD and Long Range)
    • Volkswagen ID.4
  • Winners – EVs that might be eligible for full federal credit in 2024:
    • Chevrolet Bolt EV
    • Chevrolet Equinox EV
    • Ford F-150 Lightning
    • Tesla Model 3 Performance
    • Chevrolet Silverado
    • Tesla Model Y Performance
    • Chrysler Pacifica PHEV
    • Chevrolet Blazer EV
    • Cadillac LYRIQ
    • Tesla Model X
  • Partial Winners – EVs that might be eligible for partial credit in 2024:
    • BMW X5 xDrive50e PHEV
    • Ford Escape PHEV
    • Ford E-Transit
    • Jeep Wrangler 4xe PHEV
    • Jeep Grand Cherokee 4xe PHEV
    • Lincoln Corsair Grand Touring PHEV
    • Nissan LEAF
    • Rivian R1S
    • Rivian R1T

It’s important to note that the situation is still evolving, and further clarification on the IRA rules is expected. It’s best to stay updated and consult specific manufacturers or resources like the IRS website for the latest information on eligible EVs and credit amounts. This article is not tax advice.