EV Tax Credits for These Vehicles Ending on January 1

The automotive sector has gained clarity on the eligibility criteria for electric vehicle tax credits, effective January 1, 2024, following the finalization of associated regulations. 

Notably, several models from Ford, Tesla, and General Motors are set to lose their tax credits, at least temporarily.

The evolving tax credit program, initially broadened to encompass nearly all electric vehicles in January 2023, is undergoing revisions to prioritize vehicles with battery components manufactured outside China or other “foreign entities.”

Eligibility Shift: Vehicles Affected by EV Tax Credit Changes

On December 21, GM announced its expectation that the Cadillac Lyriq and Chevrolet Blazer EV will lose eligibility for the upcoming US EV tax credit in the next year. 

Interestingly, GM has committed to compensating for this change by providing the equivalent EV tax credit purchase amount for any vehicles affected by the new guidelines starting in January.

In a similar vein, Ford faces ineligibility for several significant EVs. 

The company declared the removal of the $3,750 tax credit for the E-Transit electric van and the Mustang Mach-E in 2024. 

Additionally, the $7,500 incentive will no longer apply to the plug-in hybrid Lincoln Aviator Grand Touring. 

However, the $7,500 tax credit for the F-150 Lightning will remain, and the $3,750 incentive for the plug-in hybrid Ford Escape and Lincoln Corsair Grand Touring will stay.

Stellantis anticipates no alterations to its plug-in hybrid vehicles, with the Jeep Wrangler and Grand Cherokee 4xe SUVs expected to remain eligible for a $3,750 incentive, and the Chrysler Pacifica minivan should still qualify for a $7,500 rebate.

Meanwhile, Tesla is impacted by these changes. The $7,500 incentive for the Tesla Model 3 RWD and Long Range models is set to expire in January due to the batteries being manufactured in China. 

According to Tesla, the Model Y may also experience similar reductions.

The upcoming year’s tax credit comes with certain advantages. 

Qualified customers will receive an instant credit at the time of sale, which they can use as a discount or claim on their taxes. 

However, the challenge lies in the fact that the list of eligible EVs in 2024 will be considerably smaller due to increased regulations on battery components and minerals.