According to Bloomberg, Tesla's Cybertruck has qualified for a U.S. electric vehicle (EV) tax credit of up to $7,500 for the first time this year. This marks a milestone for the model and is part of stricter regulations set to take effect on January 1, 2025, which will also remove eligibility for other EVs to receive federal subsidies.
Data from the U.S. Department of Energy and the Environmental Protection Agency shows that 18 EV and plug-in hybrid models currently qualify for the U.S. EV tax credit, down from 22 models last year. As part of the Inflation Reduction Act signed by President Joe Biden, the revised EV tax credit requirements tighten the focus on U.S.-sourced battery components and raw materials used in battery manufacturing.
In addition to the Tesla Cybertruck (one of four Tesla models eligible for the tax credit), nine other brands' EVs also qualify for the tax credit. These include Hyundai's Ioniq 5 and Ioniq 9, as well as Kia's EV6 and EV9, all of which are receiving the tax credit for the first time.
However, the Volkswagen ID.4 crossover has lost its eligibility for the $7,500 tax credit according to the latest U.S. government list. Several other EVs and plug-in hybrids previously eligible for a $3,750 tax credit-including models from Ford, Nissan, Rivian, Stellantis, and Volkswagen Group-are no longer qualified under the revised rules.
The reduction in the number of models eligible for the EV tax credit reflects a decline in overall demand for fully electric vehicles in the U.S. market. This shift comes as Donald Trump, the next U.S. president, who has voiced intentions to eliminate the federal EV subsidy program, prepares to take office on January 20, 2025. At the same time, new car buyers face income and vehicle price restrictions, which may limit their ability to qualify for federal EV subsidies.
