Every Electric Car That Qualifies For The US Federal Tax Credit

As gas prices continue rising, most people consider buying electric vehicles or a plug-in hybrid to save money on the pump. Besides, the ownership costs of an EV are much lower because these cars require minimal repair costs and maintenance since a battery powertrain has fewer moving parts than an automatic and gas engine and doesn’t need fluid or belt tune-ups and changes.

And with the introduction of the electric car tax credit, you have another opportunity to save on the total cost when purchasing your EV. If you buy a new plug-in hybrid vehicle or an electric car, you might be eligible for a $7,500 EV tax credit. Local or state incentives can also apply. Keep reading as we outline the EVs that qualify for the electric car tax credit in 2022 and how the federal tax credit works.

Here’s Every Electric Vehicle That Currently Qualifies for the US Federal Tax Credit 

Here are the cars that qualify for the electric car tax credit 2022 as per the Environmental Protection Agency.

The number of credits are as follow:

$7500:

• Porsche Cayenne PHEV
• Toyota RAV4 PHEV
• Audi A7 TFSI e Quattro
• Chrysler Pacifica PHEV
• Rivian R1T
• Ford Mustang Mach-E
• Volvo S90 Extended Range PHEV
• Volkswagen ID.4
• Audi Q5 TFSI e Quattro
• Mercedes-Benz EQS 
• Volvo XC60 Extended Range PHEV
• Toyota RAV4 Prime PHEV
• Audi e-Tron SUV
• Jeep Wrangler PHEV
• Kia Niro EV
• Polestar 2
• Volvo XC90 Extended Range PHEV
• Mazda MX-30
• Porsche Panamera PHEV
• Lexus NX PHEV
• Hyundai Ioniq Electronic
• Volvo S60 Extended Range PHEV
• Jaguar I-place
• Audi e-tron Sportback
• BMW X5 xDrive45e
• Nissan Leaf
• Mini Hardtop Electric
• Polestar 2
• Hyundai Kona Electric

$6,843:

• Ford Escape Plug-In Hybrid
• Lincoln Corsair Hybrid
• Ford Fusion Plug-In Hybrid

$6,712:

• Porsche Panamera Hybrid
• Audi Q5 55 TFSI e
• Porsche Cayenne Hybrid
• Audi Q5 60 TFSI e

$6,587:

• Kia Sorento PHEV
• Hyundai Santa Fe PHEV
• Mitsubishi Outlander PHEV
• Hyundai Tucson PHEV

$6,534:

• Lincoln Aviator Grand Touring

$6,483:

• Lincoln Corsair Grand Touring
• Ford Escape PHEV

$5,836:

• BMW 530e xDrive
• BMW 7 Series 7 45e xDrive
• BMW 330e xDrive
• BMW X3 xDrive30e
• BMW 745e xDrive

$5,419:

• Volvo XC90 PHEV
• Volvo S90 PHEV
• Volvo S60 PHEV
• Volvo XC60 PHEV

$5,002:

• Mini Countryman Hybrid

$4,585:

• McLaren Artura

$4,543:

• Kia Niro PHEV
• Hyundai Ioniq PHEV

$4,502:

• Toyota Prius Prime
• Subaru Crosstrek PHEV

How Does a Federal Tax Credit Work for My EV? 

Virtually all new EVs and PHEVs today come with a federal tax credit that can go to a maximum of $7,500. Almost all EVs are more likely to be eligible for the $7,500 tax credit than PHEVs. Also, Hydrogen fuel cell electric vehicles are part of this program.

However, you cannot simply purchase an EV or PHEV and expect an automatic cut on your taxes. The tax credit amount you qualify for also varies based on the size of the electric battery and your income tax. For instance, if you own a Nissan Leaf and owe about $100,000 in income tax this year, you will likely qualify for the $7,500 tax credit. In case you owed $4,500 in income tax, you would likely receive a similar amount for your tax credit.

The federal tax credit program also varies with the total number of EVs sold by an automaker. When a company or manufacturer sells 200,000 electric cars eligible for the federal tax credit starts phasing out from the second calendar quarter once the automaker crosses this threshold. Past this point, all the EVs sold by the automaker are ineligible for the tax credit.

More Information

Currently, Tesla and General Motors are the only automakers that are no longer benefiting from the tax credit incentive program. The two companies have already reached the unit statutory limit of 200,00 for selling battery-dependent cars, including plug-in hybrids and EVs. 

Fortunately, the current Biden administration is keen on EVs and has proposed an extension of the federal credits for all manufacturers. This proposal could see an increase from 200,000 to 600,000 in units sold by each manufacturer, making more companies remain eligible for the federal tax credit program into the foreseeable future. The additional units would allow General Motors to regain federal credits for its new EV buyers. However, Tesla has already surpassed the 600,000 sales ceiling, so it might not benefit from the tax credits again.

There may also be an extension to increase the tax amounts for cars built in the US. Moreover, several states offer incentives to customers buying plug-in hybrids and EVs. The incentives can take the form of a rebate or tax credit. Check through your specific state’s internet portal for more information on the available provisions and exclusions in the EV incentive program.

How Much Is the Federal Tax Credit?

The government mostly states that the federal tax amount is up to a specific amount. In the case of electric vehicles, this incentive can get to as high as $7,500 additionally. However, you can only enjoy the maximum tax credit when your end-year tax bill also reaches or surpasses $7,500. Moreover, you shouldn’t expect a refund from the IRS for the other $1000, and the remaining federal credit isn’t applied to your taxes for the following year.

Note that when leasing an EV, the automaker gets the federal tax credit. The manufacturer can decide to factor in the credit in your payments to lower the cost.

Bottom Line

As you plan to buy an electric vehicle, consider the above details to ensure you benefit from the federal tax credit. You’ll not only make the universe greener, but you’ll also lower your costs. If you don’t have the cash to purchase one of these cars, Autoswiftly can help you out. Simply apply to one of our plans, choose the car you want and let us find the best deals for you. 

Recommended reading: Buying Your First Car With AutoSwiftly: What You Need To Know