CarPro News | CarPro

IRS Guide To $7500 Clean Vehicle Credit Starting in 2023

Written by CarPro | Jan 4, 2023 5:16:38 PM

If you're planning to buy or lease a new electric vehicle or fuel cell vehicle this year, here's what you need to know about federal tax credits.  The information comes from the Internal Revenue Service's EV and FCV tax credit guidelines for 2023.

According to the guidelines, if you buy or place in service a new, qualified, plug-in EV or FCV on January 1st or later and meet certain income limitations, you may be eligible for a clean vehicle tax credit up to $7,500 under Internal Revenue Code Section 30D.

On its website the IRS lists qualified manufacturers who have indicated that the vehicles are currently eligible for a credit, provided other requirements are met.  (We've shared the current list as of publishing time below.  Check back for additions.)

Note, that vehicles purchased in 2022 or before, credit eligibility was determined under different criteria.  If you need to refresh yourself on the rules, click here.

2023 Guidelines

North America Final Assembly and MSRP Requirements

Vehicle make/models that appear in the list below do NOT automatically qualify. They must also: 

  • Have undergone final assembly in North America 
  • Not exceed a manufacturer suggested retail price (MSRP) of
    • $80,000 for vans, sport utility vehicles and pickup trucks
    • $55,000 for other vehicles

To see if a specific vehicle meets the assembly requirements:

  • Note the vehicle’s Vehicle Identification Number (VIN) 
  • Go to the Department of Energy's page on Electric Vehicles with Final Assembly in North America, found here.

Use the VIN Decoder tool under "Specific Assembly Location Based on VIN".

Find a list of Qualified Vehicles on the IRS website here or look at our list below. Note that some automakers listed have entered into a written agreement with the IRS to become a "qualified manufacturer" but have not yet submitted a list of specific makes and models that are eligible.  

 

Tax Code Updates

Some changes to the tax code were also announced just before the New Year. Changes that could impact buyers include:

  • LEASED ELECTRIC VEHICLES ONLY: The U.S. Treasury Department determined that electric vehicles leased by consumers starting Jan. 1 can qualify for up to $7,500 in clean vehicle tax credits, a decision that makes those vehicles assembled outside North America eligible. The announcement is good news for many car companies that earlier this earlier lobbied for approval to use the commercial electric vehicle tax credit to boost consumer EV access. Automakers said the credit could be used to reduce leasing prices, however, vehicles made outside North America are not eligible when purchased, only leased.
  • INFLATION REDUCTION ACT IMPACTS: The Inflation Reduction Act lifts the 200,000-vehicle per manufacturer cap that had made Tesla and General Motors ineligible for the $7,500 tax credits starting January 1, 2023.  Both companies had surpassed the 200,000 unit limit previously.
  • MORE CHANGES COMING: The IRS says there will be more changes to the new rules coming in March, but we are not sure what all it will entail.  Insiders think there is a good chance many of the EVs that qualify today may not after the March, 2023 rules are enacted.

 

Clean Vehicle Rebate

***Note: there are no vehicle lists yet for the following automakers:  General Motors, Jaguar, Kia, Mazda, Mercedes-Benz, Mitsubishi, Proterra Operating Company, and Subaru.  They have entered into a written agreement with the IRS to become a "qualified manufacturer", but have not yet submitted a list of specific makes and models that are eligible.  ***

 

AUDI

Audi Model Year Vehicle Description
2016, 2017, 2018 Audi A3 e-tron
2016 Audi A3 e-tron ultra
2021 Audi A7 55 TFSI e Quattro
2022 Audi A7 TFSI e Quattro
2021 Audi A8 L 60 TFSI e Quattro
2020 Audi A8L PHEV
2019, 2021, 2022 Audi e-tron
2022, 2023 Audi e-tron GT (e-tron GT/RS e-tron GT models)
2022 Audi e-tron S (standard and Sportback models)
2020, 2021, 2022 Audi e-tron Sportback
2022 Audi Q4 50 e-tron Quattro (standard and Sportback models)
2021 Audi Q5 55 TFSI e Quattro
2020 Audi Q5 PHEV
2022, 2023 Audi Q5 TFSI e Quattro


 

Bentley

2020, 2021 Bentayga Hybrid SUV
2022 Flying Spur Hybrid

 

BMW North America

BMW Model Year Vehicle Description
2021 BMW 330e                                                                  
2021 BMW X5 xDrive45e                               

 

Ford

Ford Model Year Vehicle Description
2013, 2014, 2015, 2016, 2017 Ford C-Max Energi
2020, 2021 Ford Escape Plug-In Hybrid
2012, 2013, 2014, 2015, 2016, 2017, 2018 Ford Focus Electric
2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020 Ford Fusion Energi
2021 Ford Mustang Mach-E
2020, 2021 Lincoln Aviator Grand Touring
2020, 2021

Lincoln Corsair Grand Touring

 

Hyundai

Hyundai Model Year Vehicle Description
2017, 2018, 2019 Hyundai Ioniq Electric Battery Vehicle
2018, 2019, 2020, 2021 Hyundai Ioniq Plug-In Hybrid Electric Vehicle
2019, 2020, 2021 Hyundai Kona Electric Vehicle
2016, 2017, 2018, 2019 Hyundai Sonata Plug-In Hybrid Vehicle

 

Nissan

Nissan Model  Year Vehicle Description
2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021 Nissan Leaf S
2019, 2020, 2021 Nissan Leaf S Plus
2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 Nissan Leaf SL
2019, 2020, 2021 Nissan Leaf SL Plus
2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021 Nissan Leaf SV
2019, 2020, 2021 Nissan Leaf SV Plus

 

Stellants (Jeep, Chrysler, Fiat Brands)

Model Year Vehicle Description
2017, 2018, 2019, 2020, 2021 Chrysler Pacifica PHEV
2013, 2014, 2015, 2016, 2017, 2018, 2019 Fiat 500e
2021 Jeep Wrangler 4xe

 

Toyota


Toyota Model Year
Vehicle Description
2017, 2018, 2019, 2020, 2021 Toyota Prius Prime Plug-In Hybrid 
2012, 2013, 2014 Toyota RAV4 EV 
2021 Toyota RAV4 Plug-In Hybrid

 

Volkswagen

VW Model Year Vehicle Description
2015, 2016, 2017, 2018, 2019 Volkswagen e-Golf
2021 Volkswagen ID.4 (First Edition, Pro, Pro S, AWD Pro, AWD Pro S models)
2022, 2023 Volkswagen ID.4 (Pro, Pro S, AWD Models)
2022 Volkswagen ID.4 (Pro, Pro S, RWD Models)
2023 Volkswagen ID.4 (RWD, S RWD Models)

 

Volvo

Volvo Model Year Vehicle Description
2019, 2020, 2021 Volvo S60
2018, 2019, 2020, 2021 Volvo S90
2020, 2021 Volvo V60
2021 Volvo XC40 Recharge
2018, 2019, 2020, 2021 Volvo XC60
2016, 2017, 2018, 2019, 2020, 2021 Volvo XC90
2018, 2019 Volvo XC90 Excellence

Photo Credit:  Nissan