Big names are dropping the federal EV tax credit list in the US as the government cracks down on China
- Popular models from Volkswagen and Rivian are no longer eligible
- Nissan Leaf disappears from the list
- Tesla, Kia, Hyundai and Chevrolet are among those with the largest selection
If we rewind a few years, every electric car produced in the US was eligible for a federal tax credit of up to $7,500, but the targets have since shifted as the Biden administration introduced rules banning any electric vehicle with battery components sourced from any country. ‘foreign entity of concern’ (FEOC) – which also includes China.
Even as many automakers strive to switch suppliers and purge future vehicles of parts from blacklisted locations, the number of electric vehicles eligible for the federal tax credit is dwindling… and is the choice for 2025 more limited than ever.
The popular (and relatively affordable) Nissan Leaf has disappeared from the list, while Volkswagen’s ID.4 model, perhaps the best of all the ID models on sale, is also nowhere to be seen.
Rivian also saw all variants of the R1S and R1T fail to meet eligibility requirements, while the wonderfully affordable but out-of-production Chevrolet Bolt was also no longer eligible. Unfortunately, it would be difficult to find stock for this discontinued model anyway.
Unless you’re looking for a Tesla, including Model 3, Model X, Model Y, and Cybertruck, the list of eligible 2025 models makes for a pretty quick read.
Chevrolet fans can now opt for a Blazer EV, Equinox EV or Silverado EV, as long as the retail price doesn’t exceed $80,000. As for the Silverado, that doesn’t leave many options.
The Ford F-150 Lighting is the only Blue Oval model now eligible for tax incentives, while the Honda Prologue and Genesis GV70 Electrified offer a number of Japanese alternatives.
The Hyundai Motor Group, which also includes Kia and Hyundai, appears to have its act together as four models qualify for tax breaks between the two brands, including Kia EV6 and EV9, as well as the Ioniq 5 and the recently released Ioniq 9 .Seven-seater SUV.
Analysis: EVs face turbulent times in the US
President-elect Donald Trump has yet to determine exactly what will happen to electric vehicle tax credits or give any indication of his position on the technology. This means the list of eligible vehicles will likely change in the coming months… or could disappear completely.
However, there is a legal loophole that means the full $7,500 tax credit can be applied to any electric vehicle, regardless of the source of the parts, should the customer choose to lease the vehicle, rather than purchasing it outright .
A lease is considered a commercial sale to the leasing company and is eligible for a separate company car tax credit according to the law. Consumer Reports.
Either way, the uncertainty surrounding the future of electric vehicles in the US is having a negative impact on sales, as adoption of the new technology lags far behind that in Europe and Asia.
Even Tesla, long the best-selling EV brand in the US, recently released its fourth-quarter sales and delivery results, which showed the first annual decline in delivery numbers for the company, sending its stock price down by as much. 7%.