Understanding 2025 EV Tax Credit Changes

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Understanding the 2025 Changes to the Electric Vehicle Tax Credit

This year brings significant changes to the electric vehicle tax credit program in the United States. As part of ongoing efforts to accelerate the adoption of EVs and support domestic manufacturing, Congress has passed new rules that will impact which vehicles are eligible for the federal tax incentive and how much consumers can save. For those in the market for a new electric car, it's important to understand how the 2025 EV tax credit changes will work.

Key Changes in 2025

One new aspect of the updated tax credit is a renewed focus on promoting American-made vehicles. Starting in 2025, the credit will only apply to electric vehicles that undergo final assembly in North America. This requirement aims to bolster the US auto industry and create more American manufacturing jobs in the fast-growing EV sector.

Credit Amount and Limitations

The full EV tax credit will be set at $7,500 in 2025. However, there are price caps and income limits that determine eligibility. EVs with an MSRP over $55,000 for cars and $80,000 for trucks and SUVs will not qualify for the credit. Additionally, the credit begins phasing out for single tax filers with modified adjusted gross income over $150,000, heads of household over $225,000, or joint filers over $300,000.

Point-of-Sale Availability

Another change is the shift to make the EV tax credit available at the point of sale. This now means car buyers will be able to transfer the credit to dealers and immediately apply the savings to the purchase price of the vehicle. This change makes the credit available upfront and aims to boost EV affordability and allow more consumers to benefit from the incentive directly.

Qualifying Electric Vehicles by Brand

Which electric vehicles will be eligible for the tax credit under the 2025 rules? While not all EVs from every automaker will qualify, many popular brands will have eligible models in their lineup:

Honda will offer the fully electric Prologue SUV developed in partnership with GM and manufactured in North America.
Kia's EV6 and upcoming electric SUV models assembled in Georgia are expected to qualify.
Volkswagen is producing the ID.4 electric SUV in Tennessee, which should meet the updated requirements.
Electric sports cars from Porsche's Taycan line, manufactured at the new factory in South Carolina, will be strong contenders.
Audi will have the Q4 e-tron assembled in Mexico as an eligible option for the credit.
Many of Chevrolet's electric models, like the Bolt EV/EUV and upcoming Equinox EV, built in North America, will qualify.

Of course, there will likely be many more qualifying EVs across various brands, so it's best to carefully research specific models. Government and dealership websites will have the most up-to-date information on credit eligibility.

Taking Advantage of the 2025 EV Tax Credit

By prioritizing electric vehicles assembled locally with affordable price points, the 2025 changes to the EV tax credit aim to make going electric more accessible to a wider range of consumers. The more generous point-of-sale application of the credit will also reduce upfront costs and accelerate EV adoption. If you're looking to purchase a new electric vehicle in 2025 or beyond, be sure to take advantage of these updated tax incentives to maximize your savings while contributing to the growth of clean, American-made transportation.

Purchase a New EV

Need help in finding the perfect new electric vehicle that qualifies for the federal tax credit? If so, take a drive and visit International Cars Ltd in MA. We're here to help you navigate the 2025 changes, explore your EV options, and get behind the wheel of your next environmentally friendly ride. Together, we can drive into a greener future.

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We make every effort to present information that is accurate. However, it is based on data provided by the manufacturer & other sources and exact configuration, color, specifications, payment, accessories and certification should be used as a guide only and are not guaranteed. Picture may not represent actual vehicle. Price varies based on trim levels and options. All prices plus tax, title, registration fees and doc fees. All inventory is subject to prior sale and prices are subject to change without notice. Under no circumstances will we be liable for any inaccuracies, claims or losses of any nature. To ensure your complete satisfaction, please verify accuracy prior to purchase. Fuel economy figures shown are provided from EPA mileage estimates and may not be comparable across different model years. Your actual mileage will vary, depending on specific options selected, how you maintain the vehicle and your personal driving habits. Certain offers may not be combined with others.

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Take advantage of the $7,500 EV Tax Credit before it's too late!