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New Electric Vehicle Tax Credit
Current Status
The new clean vehicle credit (Section 30D) ended for vehicles acquired after September 30, 2025. The One Big Beautiful Bill Act (OBBBA, Public Law 119-21), signed July 4, 2025, set that end date. A vehicle counts as acquired if there was a written binding contract and a payment by September 30, 2025; delivery after that date still qualifies. The option to transfer the credit to a dealer at the point of sale ended with the credit. Nothing replaced it at the federal level.
| Program | Status | Key Date |
|---|---|---|
| New clean vehicle credit (30D) | Ended | Acquired by Sept 30, 2025 |
| Point-of-sale transfer to dealers | Ended | Acquired by Sept 30, 2025 |
| Used clean vehicle credit (25E) | Ended | Acquired by Sept 30, 2025 |
| Commercial clean vehicle credit (45W) | Ended | Acquired by Sept 30, 2025 |
What the Credit Was
Under the Inflation Reduction Act, Section 30D gave buyers of new (2023 and later) electric vehicles with a battery larger than 7 kWh a federal tax credit of up to $7,500. Motorcycles were not eligible.
Price Limits
The vehicle could not exceed these manufacturer suggested retail prices (MSRP):
- $55,000 for cars
- $80,000 for SUVs, vans and pickup trucks, as defined by the IRS
Income Limits
The buyer's modified adjusted gross income (MAGI) could not exceed:
- Single filers: $150,000
- Head of household: $225,000
- Married, filing jointly: $300,000
- Married, filing separately: $150,000
Manufacturing Requirements
Final assembly had to be in North America. The full credit also depended on two sourcing rules; a vehicle that missed them was limited to $3,750:
- Battery components: 50% had to be produced in North America (anodes, cathodes, electrolytes, cells, modules and cases).
- Critical minerals: 40% had to be mined, processed or recycled in the U.S. or a country with a U.S. free-trade agreement.
Key Dates
- 2023: The Inflation Reduction Act version of the credit applied to new vehicles.
- July 4, 2025: OBBBA signed, ending the credit early.
- September 30, 2025: Last date a vehicle could be acquired and qualify.
What Still Applies
No federal purchase credit for electric vehicles remains. Some states still offer their own incentives. Examples as of October 2026:
- Colorado: The 2026 state credit is $750, plus $2,500 for vehicles with an MSRP under $35,000, with no credit above $80,000 MSRP (down from $3,500 in 2025). HB26-1289, signed June 3, 2026, sets the 2027 credit at up to $4,500. Vehicle Exchange Colorado offers point-of-sale rebates of $9,000 for a new EV.
- Texas: The Texas Emissions Reduction Plan (TERP) Light-Duty Motor Vehicle Purchase or Lease Incentive Program offered $2,500 rebates for EVs and fuel-cell vehicles in its 2026 round, which ran October 13, 2025 to March 6, 2026, capped at 2,000 electric and hydrogen grants.
- California: The Clean Vehicle Rebate Project (CVRP) has been closed since November 2023. The Governor proposed a $200 million point-of-sale ZEV incentive in the January 2026 budget; whether it has been enacted is not confirmed.
See State EV Laws & Initiatives for more state programs.
Sources
- IRS: Credits for new clean vehicles and previously-owned clean vehicles
- NJBIA: IRS FAQ on expiring clean energy tax credits and deductions
- RSM: OBBBA changes to clean energy tax credits
- Coltura: Colorado EV tax credit
- TCEQ: TERP Light-Duty Motor Vehicle Purchase or Lease Incentive Program
- California Legislative Analyst's Office: proposed ZEV incentive
Related Coverage
- EV Federal Tax Incentives List
- State EV Laws & Initiatives
- EV Clean Cities Coalition List
- ZEV Credits & EV Tax Credits
- Used Electric Vehicle Tax Credit
- Commercial Vehicle Tax Credits
- Residential Clean Energy Tax Credits
- EV Manufacturing & Supply Chain Incentives