Federal Clean Vehicle Credit (overview)
The US federal credit for new battery-electric vehicles is administered by the IRS. Key concepts that have applied under recent rules:
- Credit amount — up to $7,500 for qualifying new BEVs, often split into battery and critical-minerals components for vehicles that don't meet both requirements fully.
- MSRP caps — SUVs, vans, and pickups may have a higher cap than sedans; check IRS guidance for the vehicle class you're considering.
- Income limits — modified adjusted gross income thresholds apply; above them, you may not qualify.
- Final assembly & sourcing — North American assembly and battery sourcing rules determine which trims qualify and for how much.
- Point-of-sale option — many dealers can apply the credit at purchase if you transfer it; otherwise you claim it on your tax return.
Always verify current rules at IRS.gov clean vehicle credits and the fueleconomy.gov tax credit list for the exact trim you're buying.
Used EV credit
A separate federal credit may apply to qualifying used BEVs purchased from a dealer, with its own price cap, income limits, and model-year rules. This guide focuses on new vehicles; see IRS Publication guidance for used purchases.
State and local rebates
Many states offer stackable rebates, HOV lane access, or utility bill credits. Examples include California's Clean Vehicle Rebate Project (when funded), Colorado and New York point-of-sale rebates, and utility programs that subsidize Level 2 home chargers. Search your state energy office and local utility — programs open and close quickly.
How this relates to our prices
Electric Compare lists starting MSRP before incentives. A vehicle marked "rebate eligible" in our table reflects manufacturer or IRS-listed qualification at the time of our last sweep — not a guaranteed credit amount for you. Compare post-incentive cost using official tools, then cross-check against our cheapest EVs and under-$40k lists.