Since the passage of the Inflation Reduction Act, the list of electric vehicles that qualify for the $7,500 federal tax credit has dwindled away as new eligibility restrictions have gone into effect. The list is now quite short, and some EVs only qualify for a $3,750 credit. Some of the EVs on the list are relatively inefficient models that provide limited environmental benefits. The battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVS) with the highest fuel economy have all been disqualified, but conscientious consumers still have a number of efficient BEVs to choose from that are eligible for the full incentive. The official list is available online at fueleconomy.gov and can change at any moment.
Five notable Tesla models are currently listed as eligible for the full $7,500. The All-Wheel-Drive Model Y has an outstanding MPGe rating of 123, making it the most efficient BEV on the list. The high performance version of the Model Y is also eligible, but its MPGe rating of 111 is somewhat lower. The only Model 3 to qualify is the high performance version, which has an MPGe rating of 113. Of the five eligible Tesla models, the Long-Range Model X is the least efficient, with an MPGe rating of 102. A promising 2024 Rear-Wheel-Drive Model Y is the final Tesla listed, but its MPGe rating has yet to be posted. Absent from the list is the disqualified Rear-Wheel-Drive Model 3, Tesla’s most efficient model, which has an exceptional MPGe rating of 132.
Volkswagen’s ID.4 models disappeared from the list when new restrictions went into effect on January 1st, but eight versions of the ID.4 reappeared on January 24th. All eight qualify for the full $7,500 credit. The 2024 ID.4 Pro is the most efficient, earning an MPGe rating of 113. Most of the ID.4 models have an MPGe rating of 107, and the addition of all-wheel-drive drops fuel economy to 102. Volkswagen is currently the only foreign automaker to qualify its BEVs for the tax credit. In order for an EV to be eligible, it must be assembled in North America, and VW builds its ID.4s in Tennessee.
The only other efficient BEVs that qualify for the full tax credit are discontinued Bolt models that might still be available at Chevrolet dealerships. General Motors suspended production of the Bolt and the Bolt EUV at the end of 2023, and the popular hatchbacks are not expected to return until 2025. The Bolt’s MPGe rating of 120 makes it the second-most efficient BEV on the list, and the slightly larger Bolt EUV is not far behind at 115. For car buyers concerned about climate change, the frugal Bolts are excellent, affordable options, but they need to be purchased right away.
Five plug-in hybrids are eligible for a tax break, but only the Chrysler Pacifica qualifies for the full $7,500. The Ford Escape is the only eligible PHEV with admirable fuel economy, earning an MPG rating of 40 when burning gasoline and an MPGe rating of 101 when powered by electricity. Toyota’s state-of-the-art Prius Prime SE boasts an MPGe rating of 127 and an impressive MPG rating of 52, but it is not eligible.
The list of qualified vehicles is sure to grow as automakers adapt their EVs to the new restrictions. Sadly, those restrictions have little to do with fuel economy, and many inefficient EVs will continue to be subsidized. If the environmental benefits of the tax incentive are to be maximized, thoughtful consumers will need to choose wisely.
