How the EV tax credit worked
To get the EV tax credit, you’d first purchase a new or used EV that was on the government’s list of approved vehicles. Note that, to qualify for the EV tax credit, you needed to earn below a certain income threshold.
The EV tax credit expired on Sept. 30, 2025.
Next, the dealer selling the car would receive the tax credit and either lower the price accordingly or pay you cash in return. If you bought from a private party, you’d receive the credit as a discount when filing your taxes.
Finally, you’d file Form 8936, the Clean Vehicle Credit form, with the Internal Revenue Service (IRS) the next time you’d do your taxes, even if the dealer took the tax credit.
How much was the EV tax credit?
Both new and used EVs qualified for the EV tax credit.
New EV tax credit
The $7,500 new EV tax credit was technically two separate $3,750 tax credits, and some vehicles only qualified for one or the other.
- Mining credit: This credit was available if a certain percentage of the minerals in your car’s battery were sourced from the U.S. or from a country we had a free-trade agreement with.
- Battery credit: This credit was available if a certain percentage of your EV’s battery was assembled in North America.
Qualifying vehicles also needed to be assembled in North America and have a manufacturer's suggested retail price (MSRP) below $55,000 for cars and $80,000 for trucks, vans, SUVs and crossovers. As a result of these and other restrictions, there weren’t too many brand-new EV models that qualified for the full $7,500 tax credit.
Used EV tax credit
For used EVs, the qualifications were a little different, and the maximum tax credit was only $4,000. To qualify, you needed to be the second owner of the vehicle (the credit only applied to the first transfer), and the car must have been at least two model years old. Additionally, the sale price of the vehicle needed to be below $25,000.
However, the used EV credit wasn’t $4,000 across the board. The amount you could receive was up to 30% of the vehicle’s price, which meant that all cars listed for more than $13,333 earned the buyer a $4,000 credit. Those that cost less earned the buyer less.
While the credit was active, the government maintained a list of all pre-owned EVs and plug-in hybrid electric vehicles (PHEVs) that qualified.
Is it still worth buying an EV?
It can be worth buying an EV if you’re interested in buying one, regardless of any tax credits. Just make sure to factor in costs and differences from gas-powered vehicles.
“When figuring out if [an EV] purchase makes sense, add in all your costs, including insurance, installing a charging station by a certified electrician, your charging costs, depreciation, payments and cost of ownership,” said Lauren Fix, an analyst with Car Coach Reports.
Keep in mind that owning an EV is still expensive. EVs are generally more expensive to buy, more expensive to insure and typically less dependable overall than their hybrid- and gas-powered equivalents.
A used EV may cost less upfront, but pre-owned EVs have their own challenges, ranging from faster-than-average depreciation to unknown battery longevity. Many are just as expensive to own and operate as new EVs.
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FAQ
Did leased vehicles qualify for the EV tax credit?
Leased vehicles technically qualified for the EV tax credit, but lessees weren’t the ones getting the benefits because the manufacturers actually owned the leased vehicles. Still, some automakers and dealerships used their tax savings to offer better overall lease terms.
Did Trump's bill remove the $7,500 federal EV tax credit?
Yes, President Donald Trump’s One Big Beautiful Bill Act (OBBB) ended the $7,500 federal EV tax credit and the $4,000 used EV tax credit. The tax credits ended on Sept. 30, 2025.
Are electric cars reliable?
Electric cars tend to be reliable vehicles. They tend to have fewer problems than gas-powered cars since they have fewer parts. However, when they do have problems, their problems tend to be more expensive. For example, new EV batteries tend to cost between $4,000 and $20,000.
Bottom line
Even though the EV tax credit has expired, it can still be worth buying an EV if you were planning to do so anyway. Just keep in mind that EVs are generally more expensive to buy and maintain than gas-powered cars, and they may be more expensive to insure.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Internal Revenue Service, “Credits for New Clean Vehicles Purchased in 2023 or After.” Accessed Feb. 21, 2026.
- Internal Revenue Service, “One, Big, Beautiful Bill Provisions.” Accessed Feb. 21, 2026.
- Internal Revenue Service, “About Form 8936, Clean Vehicle Credit.” Accessed Feb. 21, 2026.
- Internal Revenue Service, “Instructions for Form 8936 (2025).” Accessed Feb. 21, 2026.
- U.S. Department of Energy, “Federal Tax Credits for Pre-owned Plug-in Electric and Fuel Cell Vehicles.” Accessed Feb. 21, 2026.
