Buying an electric vehicle in 2025 isn’t as straightforward as it used to be. Thanks to changes in the Inflation Reduction Act, battery sourcing rules, final assembly requirements, and income caps, the federal tax credit that once applied to hundreds of models now covers only a select few.
If you’re shopping for an electric vehicle or plug-in hybrid this year and hoping to take advantage of the $7,500 tax credit, this is the guide you need. We’ve gathered the most up-to-date list of vehicles that still qualify, broken down the new rules, and explained how you can actually use the credit at the time of purchase.
What Changed in 2025?
The Inflation Reduction Act of 2022 rewrote the rules on federal EV incentives, and in 2024 and 2025, those rules got even stricter.
To qualify for the full $7,500 credit, a new electric vehicle must meet all of the following criteria:
- Final assembly must take place in North America (U.S., Canada, or Mexico)
- Battery components must be 50%+ sourced from the U.S. or free-trade partners
- Critical minerals must be 40%+ from the U.S. or allies (increasing each year)
- MSRP must be under $55,000 for cars, or $80,000 for SUVs, trucks, and vans
- The buyer must have a modified adjusted gross income (AGI) under:
- $150,000 (single)
- $225,000 (head of household)
- $300,000 (married filing jointly)
How Much Is the Credit?
You can receive:
- $3,750 if the vehicle meets either the battery component or mineral sourcing rule
- $7,500 if it meets both
If the vehicle meets neither sourcing rule—even if it’s electric and assembled in North America—you get no federal tax credit.
Can You Use the Credit at the Dealership?
Yes. In 2025, buyers can use the credit at the point of sale, applied as a discount directly off the price of the car. You no longer have to wait until you file your taxes the next year.
However:
- The dealership must be enrolled in the IRS’s EV credit program
- You’ll need to verify your income eligibility and sign a form
- The dealer will submit the claim to the IRS and reduce your sale price accordingly
Full List: EVs That Qualify for the $7,500 Credit in 2025
These vehicles meet all eligibility rules and receive the full $7,500 credit when purchased new from a participating dealer. This list is current as of April 25, 2025, based on IRS and manufacturer updates.
Tesla Model Y AWD / Long Range
- Assembly: Austin, TX / Fremont, CA
- Battery: Meets both requirements
- MSRP Cap: Under $80,000
- Tax Credit: $7,500
- Why It Qualifies: Built in the U.S. with U.S.-sourced battery packs
Chevrolet Equinox EV 2LT / 3LT / RS
- Assembly: Spring Hill, TN
- Battery: Ultium platform meets both thresholds
- Tax Credit: $7,500
- Why It Qualifies: GM confirmed all sourcing requirements for these trims
Chevrolet Blazer EV 2LT / RS
- Assembly: Ramos Arizpe, Mexico
- Tax Credit: $7,500
- Why It Qualifies: Built in North America; meets component sourcing and mineral origin requirements
Cadillac Lyriq
- Assembly: Spring Hill, TN
- Tax Credit: $7,500
- Why It Qualifies: U.S.-built Ultium platform with compliant supply chain
Ford F-150 Lightning (XLT, Lariat, Platinum trims)
- Assembly: Dearborn, MI
- Battery: Compliant
- Tax Credit: $7,500
- Why It Qualifies: North American battery sourcing confirmed
Ford Escape Plug-In Hybrid
- Assembly: Louisville, KY
- EV Range: 37 miles
- Tax Credit: $7,500
- Why It Qualifies: Meets mineral sourcing and assembly rules
Chrysler Pacifica Plug-In Hybrid
- Assembly: Windsor, Ontario (Canada)
- Tax Credit: $7,500
- Why It Qualifies: Canadian assembly counts under USMCA; battery supply chain eligible
Jeep Grand Cherokee 4xe (select trims)
- Assembly: Detroit, MI
- Tax Credit: $7,500
- Why It Qualifies: U.S. assembled; battery components sourced from trade partners
Jeep Wrangler 4xe (select trims)
- Assembly: Toledo, OH
- Tax Credit: $7,500
- Why It Qualifies: Same structure as Grand Cherokee 4xe, meets both component thresholds
Vehicles That Qualify for Partial Credit ($3,750)
These models meet only one of the two sourcing rules (battery components or critical minerals):
Tesla Model 3 Rear-Wheel Drive
- Assembly: Fremont, CA
- Tax Credit: $3,750
- Why It Only Gets Partial Credit: Uses lithium iron phosphate (LFP) batteries from China
Ford Mustang Mach-E (RWD and AWD Select/Premium)
- Assembly: Mexico
- Tax Credit: $3,750
- Why It Only Gets Partial Credit: Component sourcing meets threshold; mineral sourcing still improving
Volkswagen ID.4 (Standard and Pro trims)
- Assembly: Chattanooga, TN
- Tax Credit: $3,750
- Why It Only Gets Partial Credit: Battery components sourced from SKI, but not all minerals sourced domestically
Hyundai Santa Fe Plug-In Hybrid (Alabama-built trims)
- Tax Credit: $3,750
- Why It Only Gets Partial Credit: Meets mineral threshold, not full component compliance yet
Used EV Tax Credit (Up to $4,000)
Used EVs can still qualify for a separate $4,000 tax credit, as long as they meet the following:
- Car must be at least two years old
- Purchase price must be under $25,000
- Vehicle must be bought from a licensed dealer
- Buyer must have income under:
- $75,000 (single)
- $112,500 (head of household)
- $150,000 (married filing jointly)
How to Check If a Vehicle Qualifies
You can verify eligibility using:
- The IRS Clean Vehicle Credit site
- The U.S. Department of Energy VIN lookup tool
- Your dealership—if they’re IRS registered, they can tell you what applies at the point of sale
Ask your dealer:
- Is this car eligible for the full or partial credit?
- Is the dealership registered with the IRS EV program?
- Will the credit be applied as an immediate discount?
Tax Credit FAQ (2025)
What is the difference between a $7,500 and a $3,750 credit?
If a car meets both battery component and critical mineral sourcing thresholds, it earns the full $7,500. If it meets only one, the buyer receives $3,750.
Does the credit reduce the car’s price or show up at tax time?
Both. In 2025, the IRS allows the credit to be used at the point of sale as a discount—or claimed at tax time if preferred.
Can I get the credit if I lease?
Yes. Leased EVs qualify regardless of assembly location or battery sourcing. The credit goes to the leasing company, but they often pass it to the customer as a reduced monthly payment.
Are income caps strictly enforced?
Yes. Buyers above the income thresholds do not qualify—regardless of vehicle eligibility.
Do all trims of a qualifying model get the credit?
No. Trims built outside North America or with different battery suppliers may not qualify. Check the VIN and trim code before assuming eligibility.
Final Thoughts
The EV and plug-in hybrid tax credit in 2025 is more complicated than ever—but it’s still real money on the table. If you know where your car is built, who supplies its battery, and whether your income qualifies, you can drive away with a major discount backed by the government.
Don’t assume. Ask. Verify. And buy smart.
Stay with BidForAutos.com for the most accurate EV buying guides, real-world breakdowns, and everything you need to get the most out of your next electric or hybrid car.
