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The list of electric vehicles that qualify for the IRS clean vehicle tax credit has changed with the arrival of the new year. No longer linked to battery capacity, the credit of up to $7,500 is now tied to the sourcing of battery components—each year, an increasing amount must be extracted or refined in the US (or a free trade partner) to be eligible. The total number of eligible EVs has actually increased in 2025, from 24 last year to 27 this year, but a number of automakers' products have also dropped off the list in the process.

The $7,500 tax credit is split into two components. $3,750 is available if the battery components are made or assembled in the US. The other half now requires that 60 percent of the critical minerals in the battery—things like lithium, nickel, and so on—be extracted or refined in the US (or by a free trade partner). Last year, this threshold was 50 percent; next year, it will increase to 70 percent.

Additionally, national security concerns mean that no EV is eligible if any of its battery components are manufactured by a "foreign entity of concern," which means any company with direct links to the governments of China, Iran, North Korea, or Russia. While the latter three have no domestic EV production they're trying to sell in the US, that obviously does not apply to China, which heavily subsidizes its domestic car makers to allow them to export their vehicles at rock bottom prices to undermine local industry in other regions.

Winners and losers

Genesis' GV70 Electrified now qualifies for the full EV tax credit, as do Hyundai's Ioniq 5 and Ioniq 9, and the Kia EV6 and EV9. But those appear to be the only newly qualified EVs for 2025. And the Tesla Cybertruck joins the list as well.

Many more OEMs have lost eligibility, however. The Chevrolet Bolt EV and EUV have both fallen off the list as General Motors has ended production of those models. Nissan is still building the Leaf—in Smyrna, Tennessee, in fact—but for 2025, it too loses tax credit eligibility. Volkswagen's ID.4 similarly drops off the list, as do the Rivian R1S and R1T, which last year were eligible for half of the credit. Tesla also appears to have lost eligibility for the Model Y rear drive, but not other Model Y variants.

And now, only one plug-in hybrid EV still qualifies—the Chrysler Pacifica PHEV minivan. Last year, the partial tax credit was available for the Ford Escape plug-in hybrid, the Jeep Grand Cherokee 4xe and Jeep Wrangler 4xe, and the Lincoln Corsair Grand Touring; this year, none qualify.

Will the tax credit even exist in six months?

While those changes affect purchasing a new clean vehicle, due to a loophole, the restrictions do not apply to leased EVs. This means leasing is still probably the preferred route to go, especially for buyers who may plan on replacing their car in a few years.

Whether or not that option will exist by the end of the year remains to be seen. President-elect Donald Trump has repeatedly made well-known his opposition to clean energy and EVs, and his close advisor Elon Musk, CEO of Tesla, is also publicly in favor of ending the clean vehicle tax credit, going on record to state that the effect would be far more deleterious to rival companies than Tesla.

Killing off the tax credit will require the action of Congress, however—this cannot be done by executive action. But it is widely believed that Republicans in Congress will use the budget reconciliation process—which is immune to filibuster—to wipe out this part of the tax code.