**27 EVs Now Eligible for the Tax Credit in 2025: Essential Information**
The electric vehicle (EV) sector is constantly changing as governments, manufacturers, and consumers respond to evolving regulations and market conditions. By 2025, the roster of EVs that qualify for the IRS clean vehicle tax credit has grown from 24 to 27 models, signaling both advancements and obstacles within the industry. Nevertheless, these alterations also underscore the growing intricacies of adhering to the rigorous standards associated with the tax credit. Here’s a summary of what this entails for consumers, manufacturers, and the future of EV adoption.
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### **The IRS Clean Vehicle Tax Credit: Overview**
The IRS clean vehicle tax credit, which provides up to $7,500 for eligible EVs, has seen considerable modifications recently. Formerly based on battery capacity, the credit is currently influenced by the sourcing and manufacturing of battery components. This change fits into broader objectives to enhance domestic manufacturing and lessen dependency on foreign supply chains, especially those related to geopolitical rivals.
The $7,500 credit is split into two segments:
– **$3,750** is granted if the battery components are manufactured or assembled within the United States.
– **$3,750** is awarded if at least 60% of the vital minerals in the battery—such as lithium and nickel—are extracted or refined in the U.S. or by a free trade partner.
This critical minerals requirement was set at 50% for 2024 and is expected to increase to 70% in 2026, indicating a gradual tightening of conditions.
Moreover, cars with battery components produced by “foreign entities of concern” (e.g., companies associated with the governments of China, Iran, North Korea, or Russia) are not eligible for the credit. This regulation aims to tackle national security issues and counteract China’s heavily subsidized EV exports, which have been claimed to affect local industries elsewhere.
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### **Winners: New Entrants to the Eligible EV Array**
A number of new models have been added to the list of EVs qualifying for the complete tax credit in 2025:
– **Genesis GV70 Electrified**
– **Hyundai Ioniq 5 and Ioniq 9**
– **Kia EV6 and EV9**
– **Tesla Cybertruck**
These inclusions reflect the manufacturers’ commitment to aligning their supply chains with the tax credit’s stipulations. For instance, Hyundai and Kia have made substantial investments in U.S.-based production to guarantee their vehicles meet the criteria.
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### **Losers: Models That Lost Qualification**
Although the roster of eligible EVs has increased, several models have been taken off the list due to production changes or inability to comply with the revised standards:
– **Chevrolet Bolt EV and EUV**: General Motors has ceased production of these popular models, thus removing them from eligibility.
– **Nissan Leaf**: Even though it is made in Tennessee, the Leaf does not qualify in 2025.
– **Volkswagen ID.4**: This model has likewise lost its eligibility.
– **Rivian R1S and R1T**: These vehicles qualified for half of the credit in 2024 but are no longer on the list.
– **Tesla Model Y Rear Drive**: Although other Model Y variants continue to qualify, the rear-drive version has been disqualified.
In addition, the number of qualifying plug-in hybrid electric vehicles (PHEVs) has decreased to just one: the **Chrysler Pacifica PHEV**. The previous year’s list included models such as the Ford Escape PHEV, Jeep Grand Cherokee 4xe, Jeep Wrangler 4xe, and Lincoln Corsair Grand Touring, but none of these qualify for 2025.
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### **Leasing as a Bypass**
For consumers wanting to sidestep the demanding requirements tied to the tax credit, leasing emerges as an appealing alternative. Leased EVs are exempt from the same sourcing and manufacturing constraints, making this option especially attractive for individuals planning to upgrade their vehicle within a few years. However, this loophole may not endure indefinitely, particularly as policymakers refine EV-related incentives.
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### **The Political Environment: Will the Tax Credit Endure?**
The fate of the clean vehicle tax credit is uncertain. President-elect Donald Trump has voiced strong disapproval of clean energy initiatives, including EV incentives. His close advisor, Tesla CEO Elon Musk, has also openly advocated for ending the tax credit, suggesting that it would adversely affect competitor automakers while having minimal effect on Tesla.
A repeal of the tax credit would necessitate Congressional action, as it cannot be revoked solely through executive orders. However, with a Republican-led Congress, there is speculation that the budget reconciliation process—protected from filibuster—could be utilized to abolish this segment of the tax code.
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### **Implications for Consumers**
For those considering an EV in 2025, the tax credit continues to be a crucial element in lowering the
