A Complete Guide to the Federal and State Electric Vehicle Incentives

Electric vehicles (EVs) have taken the world by storm in the last few years. However, because the technology is relatively new, EVs tend to have a high price tag. Incentives can lower the upfront cost of electric cars, making it easier for drivers to afford them.

One of the best electric car incentives is the $7,500 federal EV tax credit, but not all cars qualify for the discount. 

We’ll explain everything you need to know about the EV tax credit and provide information about state and utility EV incentives available in your area.

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How much is the federal EV tax credit worth?

If the car’s battery meets necessary battery requirements, you can receive a tax credit of either $3,750 or $7,500 when purchasing a qualifying vehicle. 

The total value of the tax credit depends on two key battery factors:

1. If the vehicle’s battery meets critical mineral requirements and

2. If the vehicle’s battery meets battery component requirements

If the vehicle meets one of these battery criteria and other eligibility factors, you can earn a $3,750 credit. The electric car will earn a $7,500 tax credit if it meets both battery requirements.

Not all electric cars are eligible for the federal tax credit. Much like the tax credit for purchasing solar, the Inflation Reduction Act revamped the qualifications for the EV tax credit. 

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How to qualify for the EV tax credit

Five main factors impact an electric car’s eligibility for the federal tax credit, including the taxpayer’s income, the car’s MSRP, where the vehicle was assembled, vehicle size, and battery requirements. 

• Taxpayer income and status: A taxpayer’s modified adjusted gross income for the current or prior year must be $300,000 or less for joint filers, $225,000 or less for head-of-household filers, and $150,000 or less for all other filers. 

• MSRP limit: The MSRP of electric pickup trucks, vans, or SUVs cannot exceed $80,000. All other passenger vehicles must have an MSRP of $55,000 or less. EVs exceeding these MSRP limits are not eligible for the tax credit. 

• Assembly location: The vehicle's final assembly must occur in North America. The vehicle identification number (VIN) can tell where a car was assembled.

• Vehicle requirements: Eligible new clean vehicles must weigh less than 14,000 pounds, have at least a 7 kWh battery, and must have been placed in service on January 1, 2023, or later. 

• Battery requirements: EV batteries must meet critical mineral sourcing and battery component requirements for the full $7,500 tax credit. A partial credit of $3,750 is earned if only one is met.

You will receive the full or partial tax credit if your vehicle checks off the above. When filing for the EV tax credit, you’ll need a time of sale report (a seller report) that provides information like the dealer name, address, VIN, and the car’s make and model. 

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What cars are eligible for the federal EV tax credit?

Electric vehicles from Acura, Cadillac, Chevrolet, Ford, Honda, Nissan, Rivian, Tesla, and Volkswagen are eligible for the federal EV tax credit. The following table outlines what fully electric car models qualify for the federal tax credit:

Make + Model*	Model Year	Credit value
Acura ZDX	2024	$7,500
Cadillac Lyriq	2024	$7,500
Chevrolet Blazer EV	2024	$7,500
Chevrolet Bolt EUV and EV	2022-2023	$7,500
Chevrolet Equinox EV	2024	$7,500
Ford F-150 Lightning (Extended and Standard Range)	2022 - 2024	$7,500
Honda Prologue	2024	$7,500
Nissan Leaf S + Leaf SV Plus	2024	$3,750
Rivian R1S Dual Large, Standard, Standar+, Performance, and Large	2022 - 2024**	$3,750
Tesla Model 3 Long Range AWD + Performance	2023 - 2024**	$7,500
Tesla Model X Long Range	2023 - 2024	$7,500
Tesla Model Y AWD, Long Range RWD, Performance, RWD	2023 - 2024**	$7,500
Volkswagen ID.4 Pro + Standard (including AWD and Plus variants)	2023 - 2024	$7,500

^{*Not every version of each model will qualify. Verify with the car dealer for eligibility of your specific car.}

^{**Eligible year varies with variant.} 

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How much money can you save with the federal EV incentive?

The federal EV tax credit is the best incentive for those planning to purchase an EV in 2025. The table below shows popular electric vehicles eligible for the full $7,500 credit and how much they cost before and after the credit is applied. 

EV make and model	Est. starting MSRP	Est. cost after tax credit
2023 - 2024 Cadillac Lyriq	$58,590	$51,090
2023 Chevy Bolt	$26,500	$19,000
2023 Chevy Bolt EUV	$27,800	$20,300
2024 Chevy Equinox	$41,900	$34,400
2024 Tesla Model 3 (Performance and Long Range AWD)	$47,740, $54,990	$40,240, $47,490
2024 Tesla Model Y (Performance, Long Range AWD, Long Range RWD)	$44,990, $51,490	$37,490, $43,990
2024 Tesla Model X AWD	$77,990	$70,490

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Is there a tax credit for used EVs?

Yes! Pre-owned all-electric, plug-in hybrid, or fuel cell electric vehicles purchased on or after January 1, 2023, may be eligible for a federal tax credit.

The credit equals 30% of the sale price up to $4,000. To qualify for this incentive, you must:

• Be an individual who bought the vehicle for use and not for resale.

• Not be the original owner.

• Not claimed as a dependent on another person’s tax return.

• Not have claimed another used clean vehicle credit within 3 years before the purchase date.

• Have an aggregated gross income that does not exceed $150,000 for married filing jointly, $112,500 for heads of households, and $75,000 for all other filers.

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EV incentives by state

In addition to the tax credit, which is available across the United States, some states have also jumped on the bandwagon to offer additional incentives to those who own electric vehicles. 

State	Program	Status
California	Clean Vehicle Rebate Project (CRVP)	Closed
Colorado	Colorado Electric Vehicle Tax Credit	Open
Connecticut	Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR)	Open
Delaware	Delaware Clean Vehicle Rebate Program (DNREC)	Open
Illinois	Illinois Electric Vehicle Rebate Program	Open
Maine	Efficiency Maine	Open
Maryland	Maryland Excise Tax credit	Closed
Massachusetts	Massachusetts Offers Rebates for Electric Vehicles (MOR-EV)	Open
Minnesota	Minnesota EV Rebate Program	Closed
New York	Drive Clean Rebate	Open
Oregon	Go Electric Oregon	Closed
Pennsylvania	Pennsylvania Alternative Fuel Rebate Program	Open
Rhode Island	Drive EV Rhode Island	Open
Vermont	Drive Electric Vermont	Open

Colorado Electric Vehicle Tax Credit

How it works: Much like the federal EV tax credit, taxpayers in Colorado can recieve a state tax credit of $5,000 for the purchase or lease of a new EV or plug-in hybrid vehicle with an MSRP of up to $80,000 on or after July 1st, 2023.

For leases, the agreement must have an initial term of at least two years. Also, beginning January 1st, 2024, Coloradans who purchase an EV with an MSRP up to $35,000 will be eligible for an additional $2,500 tax credit. 

Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR)

How it works: Connecticut residents who purchase or lease an eligible vehicle from a licensed  dealership can receive a standard rebate depending on what kind of vehicle they purchase; the current offerings are:

• $4,250 for an eligible new battery electric vehicle

• $2,250 for a plug-in hybrid electric vehicle

• $7,500 for a fuel cell electric vehicle

The CHEAPR program extended its incentive in 2023 by introducing Rebate+ New and Rebate+ Used. Qualifying individuals can receive an additional rebate for new or used vehicles at the time of purchase. When combined with the standard rebate, vehicle owners can receive up to $9,500!

Delaware Clean Vehicle Rebate Program (DNREC)

How it works: Delaware offers a cash rebate program for the purchase or lease of a new or used plug-in battery or hybrid electric vehicle. Vehicles purchased after May 1st, 2024 are eligible for the rebate and must be applied for within 90 days of the purchase date. 

The rebate amount received depends on the base MSRP value and type of vehicle. The current rebate offers are:

• MSRP/Fair market value $40,000 or less: $2,500

• MSRP between $40,000 and $50,000: $1,500

• Hybrid vehicle MSRP below $50,000: $1,000

• Used hybrid vehicle fair market value of $40,000 or less: $1,000

Illinois Electric Vehicle Rebate Program

How it works: Illinois residents that purchase new or used all-electric vehicles from a licensed dealer in the state can be eligible for the incentive. The Illinois EV rebate amounts are:

• A $4,000 rebate for the purchase of an EV

• A $1,500 rebate for the purchase of an electric motorcycle

 Please note that the application cycle for this incentive is not currently open, but is expected to reopen in 2025 due to newly allocated funds.

Efficiency Maine EV rebates

How it works: Residents of Maine can be eligible for an electric vehicle rebate for the purchase of a new electric vehicle, or plug-in hybrid. Those who purchase a new battery electric vehicle can earn a rebate up to $2,000, or up to $1,000 for a plug-in hybrid. 

To be eligible for the rebate, the EV must have a certain MSRP value depending on the type of vehicle:

• $80,000 or less for eligible trucks or commercial vans

• $55,000 or less for other eligible new vehicles 

• Leased for at least 36 months or more

Massachusetts Offers Rebates for Electric Vehicles (MOR-EV)

How it works: The MOR-EV program is a bit of an umbrella term, as there are a few different programs that fall under it.  All of the MOR-EV programs provide EV drivers with different incentives in the state of Massachusetts depending on the type of vehicle purchased, how it was purchased, and low-income requirements. 

The standard rebate offers a $3,500 rebate to qualifying purchases or leases of new, eligible EVs. There is a rebate option for used vehicles also equal to $3,500 – but it is an income-qualifying program.

There is a $7,500 rebate available to qualifying purchases of light-duty electric pick-up trucks and other heavy vehicles. 

New York Drive Clean Rebate

How it works: New York state offers a point-of-sale rebate towards the purchase or lease of a new electric or plug-in hybrid car. The rebate you receive will depend on how much battery-only range the car has. Offers for different EPA ranges include:

• 200+ miles: $2,000

• 40-199 miles: $1,000 

• 40 miles or less: $500

Also, if the EV you purchase has an MSRP greater than $42,000, you will receive a $500 rebate. 

Pennsylvania Alternative Fuel Rebate Program

How it works: Pennsylvania offers a rebate for new and one-time pre-owned EVs and trucks and also hybrids. For your vehicle to be eligible, it must have a final price of $50,000 or less for a purchase or lease. Rebate amounts currently offered are:

• Battery electric vehicle: $3,000

• Plug-in hybrid EV: $1,500

• Electric motorcycle: $500

There is also a $1,000 incentive offered to income-qualified customers that can be combined with the original rebate offering.

Drive EV Rhode Island

How it works: Through the Drive EV Rhode Island incentive program, residents can receive a one-time rebate when they purchase or lease a new EV, fuel-cell EV, or plug-in hybrid vehicle. Qualifying vehicles must be purchased from a licensed Rhode Island dealer or a qualified out-of-state dealership. 

New vehicles purchased or leased can receive a rebate of up to $1,500 and $1,000 for plug-in hybrids. When applying, residents must submit the following:

• Valid Rhode Island registration certificate

• Final sales or lease agreement, including an itemization of credits, discounts, and incentives received (if applicable)

• A Rhode Island driver's license

• Signed W-9 form

Drive Electric Vermont

How it works: Vermont offers a variety of incentives through Drive Electric Vermont. You can earn up to $5,000 for the purchase of a new EV or plug-in hybrid vehicle, but the total incentive amount you receive depends on income, tax filing status, and vehicle type (hybrid or all-electric).

You can receive the rebate from the participating dealership at point-of-sale, or claim the incentive through an application process.

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Are there EV charger incentives available in 2025?

At-home charging is considered the best option when purchasing an EV, but installations can be pricey. Lucky, there are EV charger incentives out there to help lower the upfront cost of an installation. 

Most notably, there is a tax credit available for individuals who install electric vehicle charging equipment until 2033. The tax credit equals 30% of the cost of installing an EV charger, up to $1,000! To claim the credit, fill out tax form 8911, but also consider consulting with a tax professional for further guidance. 

Aside from this, there are local EV charger incentives available to homeowners. For instance, New Jersey offers a $250 rebate for qualifying level 2 charger installations. 

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Is buying an EV worth it for you?

There are plenty of benefits to owning an electric vehicle, including less maintenance and lowering your carbon footprint.

Although most EVs have a higher price tag than traditional vehicles, the long-term costs are significantly lower. Fueling a gas car is substantially more expensive than charging an EV, and with fewer maintenance requirements, you also have lower maintenance costs.

Pairing your EV with solar panels can increase your savings even further. Thanks to a 30% tax credit and higher-than-ever electric prices, solar panels are an attractive investment in most scenarios. When you use solar to charge an EV, you’re not only saving the planet, you’re also saving money.

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EV incentives FAQs