- Which EVs Are Affected by the “One Big Beautiful Bill?”
- The Details:
- What Type of Electrified Vehicle is Affected?
- Which Specific EV Models Are Affected By the Big Beautiful Bill?
- Were There Income Requirements For the Tax Credit?
- What Was the Leasing Loophole and is it Also Eliminated?
Which EVs Are Affected by the “One Big Beautiful Bill?”
In short, all of them. All fully-electric vehicles (EVs), plug-in hybrid vehicles (PHEVs), and fuel cell vehicles—new or used—that were previously eligible for federal tax credits will no longer qualify for them after September 30, 2025.
The Details:
Donald Trump’s “One Big Beautiful Bill” was signed into law on July 4, and the 900-plus-page legislation includes a number of changes to current tax rules that have major implications for Americans who may be thinking of buying a new electric car, truck, or sport utility vehicle.
Put simply, if you are or may be in the market for a new EV, a plug-in hybrid or a fuel cell electric vehicle, you should know that any and all federal electric vehicle tax incentives will disappear entirely on September 30, 2025.
Shoppers must purchase the vehicle (sign a contract on it) by the September 30 deadline and make some type of payment towards the vehicle -- be it a 'nominal downpayment' or the trade-in of your old vehicle, according to the IRS.
The IRS has clarified that buyers do not have to have taken delivery of it by that date -- a change from the initial announcement that customers would need to have taken delivery of it by the deadline.
What Types of Electrified Vehicle Are Affected?
New Vehicles:
Prior to the Sept 30 deadline, any new fully electric vehicle, plug-in hybrid vehicle, or fuel-cell vehicle, was eligible for a federal tax credit, provided that the owner meet certain income requirements.
Those incentives now disappear after Sept 30.
New vehicles were eligible for up to $7,500 in tax credits while used vehicles were eligible for up to $4,000 in tax credits.
For a new vehicle to qualify, it had to have an MSRP of less than $80,000 for vans, trucks, and SUVs, or less than $55,000 for cars.
Further, the EV must have a battery capacity of at least 7 kilowatt hours, must weigh less than 14,000 pounds, must be made by a qualified automaker, and must undergo final assembly in North America.
To qualify for the max $7,500 EV tax credit, the vehicle’s battery must use critical minerals and components sourced from approved countries, though vehicles that don’t meet all sourcing requirements may still qualify for a partial EV tax credit of $3,750.
That’s currently a technicality, though, since all vehicles listed as eligible from the Department of Energy qualify for the full $7,500 credit, which until the passing of this bill were supposed to be in effect through 2032.
Used Vehicles:
For used vehicles to quality, they had to cost less than $25,000.
Buyers considering a used EV who can complete their purchase before the end of September may also qualify for a federal tax credit of up to $4,000.
Again, rules apply for used electric vehicles. This used EV tax credit equals 30% percent of the sale price up to a maximum credit of $4,000. In order to qualify for this used EV tax credit, the vehicle must be purchased from a dealer (not a private owner), its purchase price cannot be higher than $25,000 and the vehicle must be at least two model years old.
Since we’re well into the 2025 model year, that means vehicles must be from 2023 or older in order to qualify.
Which Specific EV Models Are Affected by the Big Beautiful Bill?
As of this writing, the United States Department of Energy lists 21 vehicle nameplates on the fueleconomy.gov website that are eligible for a $7,500 federal EV tax credit.
Several of those electric cars—including popular electric pickup trucks such as the Ford F-150 Lightning and crossovers such as the Tesla Model Y—are offered with multiple powertrain options, which leaves the entire list with 29 entries.
Here's the full list of EVs that, as of this writing, qualify for a full federal EV tax credit:
- Acura ZDX EV (2024-2025 model years with an MSRP of $80,000 or below)
- Cadillac Lyriq (2024-2025 model years with an MSRP of $80,000 or below)
- Cadillac Optiq (2025 model year with an MSRP of $80,000 or below)
- Cadillac Vistiq (2026 model year with an MSRP of $80,000 or below)
- Chevrolet Blazer EV (2024-2026 model years with an MSRP of $80,000 or below)
- Chevrolet Equinox EV (2024-2026 model years with an MSRP of $80,000 or below)
- Chevrolet Silverado EV (2025-2026 model years with an MSRP of $80,000 or below)
- Chrysler Pacifica Hybrid PHEV (2024-2025 model years with an MSRP of $80,000 or below)
- Ford F-150 Lightning Flash (2024-2025 model years with an MSRP of $80,000 or below)
- Ford F-150 Lightning Lariat (2023-2025 model years with an MSRP of $80,000 or below)
- Ford F-150 Lightning XLT (2023-2025 model years with an MSRP of $80,000 or below)
- Genesis Electrified GV70 (2026 model year with an MSRP of $80,000 or below)
- GMC Sierra EV (2026 model year with an MSRP of $80,000 or below)
- Honda Prologue (2024-2025 model years with an MSRP of $80,000 or below)
- Hyundai Ioniq 5 (2025 model year with an MSRP of $80,000 or below)
- Hyundai Ioniq 9 (2026 model year with an MSRP of $80,000 or below)
- Jeep Wagoneer S (2025 model year with an MSRP of $80,000 or below)
- Kia EV6 (2026 model year with an MSRP of $80,000 or below)
- Kia EV9 (2026 model year with an MSRP of $80,000 or below)
- Tesla Cybertruck Dual Motor (2025 model year with an MSRP of $80,000 or below)
- Tesla Cybertruck Long Range (2025 model year with an MSRP of $80,000 or below)
- Tesla Cybertruck Single Motor (2025 model year with an MSRP of $80,000 or below)
- Tesla Model 3 Long Range All-Wheel Drive (2025 model year with an MSRP of $55,000 or below)
- Tesla Model 3 Long Range Rear-Wheel Drive (2025 model year with an MSRP of $55,000 or below)
- Tesla Model 3 Performance (2025 model year with an MSRP of $55,000 or below)
- Tesla Model X All-Wheel Drive (2025 model year with an MSRP of $80,000 or below)
- Tesla Model Y Long Range All-Wheel Drive (2025-2026 model years with an MSRP of $80,000 or below)
- Tesla Model Y Long Range Rear-Wheel Drive (2025-2026 model years with an MSRP of $80,000 or below)
- Tesla Model Y Performance (2025 model year with an MSRP of $80,000 or below)
Were There Income Requirements for the Tax Credit?
In short, yes—the buyer must also qualify, according to the IRS.
First, the purchaser must be buying the electric vehicle for their own personal use.
Second, their modified adjusted gross income (AGI) cannot exceed $300,000 for married couples filing jointly, $225,000 for heads of households, or $150,000 for all other buyers.
The buyer’s AGI, as reported on their tax return, must fall below the income threshold in either the current tax year they take ownership of the vehicle or in the prior year.
In addition, a buyer must have a tax liability of at least $7,500 to claim the max credit. This means that a buyer could only get back an amount equal to (not more than) what they owe in taxes. For example, a taxpayer who owes $5,000 in taxes would only be able to receive a credit totaling that same $5,000. It’s not possible to apply any excess credit to future tax years.
What Was the Leasing Loophole and Is It Also Eliminated?
A loophole in the Inflation Reduction Act of 2022, which was passed by the Biden Administration, allowed the full $7,500 rebate to be applied to new EV leases. After September 30, this loophole will also be eliminated, which means there will no longer be tax incentives for leased electric vehicles.
Some electric cars that didn’t qualify for the federal EV tax credit benefited from the language used in the Inflation Reduction Act and were considered qualifying vehicles when leased.
Since dealerships received the clean vehicle tax credit instead of the buyer at the time of sale and wording that allowed leased cars to be classified as commercial vehicles, eligible vehicles weren’t held to the same battery component sourcing requirements as new electric vehicles, and income limits didn’t apply.
