Earlier this week, the IRS began enforcing the new clean vehicle tax credit rules. This program is an incentive of up to $7,500 for the purchase of a new battery-electric vehicle, plug-in hybrid EV (or hydrogen fuel cell EV), albeit with some conditions, including a requirement for a certain level of domestic content in those cars’ battery packs. As a result, many previously qualifying vehicles lost their eligibility, but not all.
When the rules went into effect on April 18, 10 models qualified for the full $7,500 tax credit, and another seven were eligible for a $3,750 credit. The Volkswagen ID.4 was a notable omission from the list, which was puzzling at the time given that VW now builds its electric crossover in Chattanooga, Tennessee. Perhaps it was a day late with its paperwork to the IRS, because the ID.4 now appears on the US Environmental Protection Agency’s official list of eligible vehicles.
“This is great news for consumers in the US because it expands the choice of truly affordable EVs,” said Pablo Di Si, president and CEO of Volkswagen Group of America. “The ID.4 is already one of the lowest-priced electric SUVs on the market, and the $7,500 Federal Tax Credit makes it even more attainable. This shows that we made the right decision to localize production of the ID.4 in Tennessee and invest even further in battery production, components and innovation. Every ID.4 sold supports thousands of American jobs and helps advance our goal of a carbon-neutral future.”
Taking the tax credit into account brings the price of the cheapest ID.4 down to $31,495.
Volkswagen isn’t the only automaker to return to the list. Rivian also reappeared, and both the R1T pickup truck and R1S SUV qualify for half of the tax credit as long as you pick a version that costs less than the $80,000 price cap.
That is, in fact, possible. The dual-motor R1T pickup starts at $73,000 for the standard battery pack with a range of 270 miles (435 km), and even with the 350-mile (563 km) large battery pack, the truck’s MSRP stays below the price cap.
Those wanting a Rivian SUV instead of a pickup have fewer choices—just one in fact, the dual-motor R1S with the standard 260-mile (418 km) battery pack, which starts at $78,000.
Finally, it looks like the forthcoming Chevrolet Blazer will also be eligible for the full tax credit. Chevy will show off the new Blazer EV this July, with a starting price of around $45,000.
Here is the new list of vehicles that qualify for the $7,500 clean vehicle tax credit:
- Cadillac Lyriq
- Chevrolet Blazer
- Chevrolet Bolt
- Chevrolet Bolt EUV
- Chevrolet Silverado EV
- Chevrolet Equinox EV
- Chrysler Pacifica PHEV
- Ford F-150 Lightning
- Lincoln Aviator Grand Touring PHEV
- Tesla Model 3 Performance
- Tesla Model Y
- Volkswagen ID.4
Seven other plug-in vehicles are eligible for $3,500 of the tax credit, as they satisfy half of the domestic battery requirements. These models are:
- Ford Escape PHEV
- Ford E-Transit
- Ford Mustang Mach-E
- Jeep Wrangler 4xe
- Jeep Grand Cherokee 4xe
- Lincoln Corsair Grand Touring PHEV
- Rivian R1S
- Rivian R1T
- Tesla Model 3 Standard Range
As noted previously, the domestic sourcing requirements do not apply to leased EVs and plug-in hybrids, as the Internal Revenue Service does not hold commercial buyers to the same standards. Not every automaker’s lender is offering a $7,500 lease incentive, but the list includes Audi, BMW, Chrysler, Hyundai, Jaguar, Lucid, Mercedes-Benz, Polestar, Porsche, Volkswagen, and Volvo.