Who qualifies for the federal clean vehicle credit for new EVs

Eligibility depends on income limits (150,000 dollars single, 225,000 dollars head of household, 300,000 dollars joint), vehicle MSRP caps (under 55,000 dollars for cars, under 80,000 dollars for SUVs, vans, and trucks), final assembly in North America, and battery component and critical mineral requirements

What are the income limits for the used EV credit

Used EV credit income caps are 75,000 dollars for single filers, 112,500 dollars for head of household, and 150,000 dollars for joint filers, in addition the vehicle must be at least two model years old, cost 25,000 dollars or less, and be purchased from a licensed dealer

Do vehicle price caps affect eligibility

Yes, for the federal new EV credit the MSRP must be below 55,000 dollars for cars and below 80,000 dollars for SUVs, vans, and trucks, some trims of the same model may qualify while others do not

What assembly and battery sourcing rules apply

Final assembly must occur in North America, and eligibility for the full amount requires meeting both battery component and critical mineral sourcing thresholds, vehicles meeting only one requirement may qualify for a partial credit

What are the key requirements for the used EV credit

The vehicle must be at least two model years old, have a purchase price of 25,000 dollars or less, be bought from a licensed dealer, and the buyer cannot have claimed a used EV credit in the prior three years

Can leasing help if I do not meet purchase eligibility

Until September 30, 2025, the lessor may claim the federal credit and pass the value to you as a discount even when a purchased version would not qualify, after that date leased vehicles must meet the same rules as purchased vehicles

Why does EV incentive eligibility change over time

Policies, sourcing rules, trade agreements, and manufacturing locations evolve, MSRP changes and battery supply shifts can also affect whether a specific trim remains eligible

How can I verify if a specific EV qualifies today

Check current IRS and manufacturer lists, confirm the exact trim, assembly location, and MSRP, and use the GreenCars EV Incentive Tool to see real time eligibility based on your location and situation

Who Qualifies for EV Incentives, and Why It Changes

Kevin Jennings

August 12, 2025

min

Not all drivers or vehicles qualify for EV incentives. This guide covers income caps, vehicle requirements, leasing vs. buying, and evolving eligibility rules.

Tesla electric model s parked under large public solar EV charging panel

Incentives Aren’t Guaranteed for Everyone

Electric vehicle (EV) incentives can make a significant difference in the cost of buying or leasing a plug-in car. However, qualifying is not as simple as picking any EV off the lot. Eligibility is based on a combination of factors including your income, the vehicle’s specifications and price, how the vehicle is used, and even where it is built. As policies evolve, so do the rules.

Whether you are buying new or used, or considering leasing, it is important to understand who qualifies, why the rules change, and what to watch for.

1. Income-Based Eligibility

Many EV incentives, especially federal and state tax credits, have income caps to prioritize middle- and lower-income buyers.

Federal income limits for the clean vehicle credit (new EVs):

Single filers: $150,000 or less
Head of household: $225,000 or less
Joint filers: $300,000 or less

If your income is above these limits, you do not qualify for the federal credit for new EVs, even if the vehicle meets all other requirements.

For used EVs, the caps are lower:

Single filers: $75,000 or less
Head of household: $112,500 or less
Joint filers: $150,000 or less

2. Vehicle Price and Assembly Requirements

Federal incentives also have price caps to limit eligibility to more affordable models:

Cars: MSRP under $55,000
SUVs, vans, and trucks: MSRP under $80,000

In addition:

Final assembly must occur in North America
The vehicle must meet battery component and critical mineral sourcing requirements for full credit eligibility

Some trims of the same model may qualify while others do not. Always confirm eligibility through the GreenCars EV Incentives Tool or the IRS list of qualifying vehicles.

3. New vs. Used Vehicle Requirements

Used EV incentives have their own rules:

Vehicle must be at least two model years old
Purchase price must be $25,000 or less
Must be purchased from a licensed dealer (not a private party)
Buyer cannot have claimed a used EV credit in the past three years

These rules are designed to expand EV access to more buyers, particularly those seeking lower upfront costs.

4. Leasing Offers More Flexibility, But Not for Long

If you do not qualify for incentives due to income, price, or sourcing limitations, leasing has been a common workaround. In many cases:

The leasing company claims the federal credit
The credit can be passed on to you as a discount at the point of sale
Vehicle sourcing and battery requirements have not applied under this arrangement

Important: This leasing flexibility ends on September 30, 2025. After that date, leased vehicles must meet the same eligibility requirements as purchased EVs.

5. Why Incentive Eligibility Keeps Changing

EV incentives are influenced by policy, trade, and technology shifts. Changes may occur due to:

New legislation, such as the Inflation Reduction Act or other federal bills
Adjustments to battery sourcing and mineral requirements
Trade agreements that impact eligible countries
Changes in where vehicles are manufactured or assembled

For example, an EV that qualifies for the full credit today may lose eligibility next year if its battery sourcing changes or its MSRP increases above the cap.

Final Thoughts

Qualifying for EV incentives depends on more than simply owning an electric car. Your income, the vehicle’s specifications and price, where it is built, and how you choose to buy or lease all matter. With federal credits and current leasing flexibility ending after September 30, 2025, timing your purchase is more important than ever. Use tools like the GreenCars EV Incentive Tool to check real-time eligibility for your state, your income, and your chosen vehicle.