Thinking About Going Electric in 2025? Here’s What You Need to Know!
If you’re considering switching to an electric vehicle (EV) in 2025, you’re probably wondering how the federal EV tax credit works and whether it’s still a smart financial move. Well, you’re in the right place!
I’m Sonia Narvaez, a licensed CPA, and today, I’m breaking down everything you need to know about the updated EV tax credit—how much you can get, who qualifies, and the key changes that might affect your decision. Let’s get into it!
How Much Can You Get in 2025?
The federal EV tax credit for 2025 still offers up to $7,500 for new EVs and up to $4,000 for used EVs—but there are some essential requirements your vehicle needs to meet:
✔️ Battery capacity of at least 7 kilowatt-hours
✔️ Gross vehicle weight under 14,000 pounds
✔️ Manufactured by a qualified automaker
✔️ Final vehicle assembly must be in North America
✔️ Meets critical mineral & battery component requirements (which have become stricter in 2025!)
New Perks: Point-of-Sale Credit
One of the best changes? You no longer have to wait until tax season to claim the credit!
Starting in 2024 and continuing in 2025, you can apply the credit directly at the dealership when you buy the car. This means a lower purchase price right away instead of waiting months for a tax refund.
If you’re financing your EV, this also means lower loan amounts and less interest payments. Now that’s a big win!
Income Limits & Price Caps
Now, before you get too excited, let’s talk eligibility.
To qualify for the full tax credit, your income must be under these limits:
- $300,000 for married couples
- $225,000 for heads of household
- $150,000 for single filers
Additionally, not all EVs qualify—the credit is only available for vehicles priced at:
🚗 $55,000 or less for sedans
🚙 $80,000 or less for SUVs, trucks, and vans
So, What’s Changed in 2025?
If you’ve been following EV tax credits over the years, you’ll notice that 2025 builds on some big changes introduced since 2023 under the Inflation Reduction Act. Here’s a quick look at the key differences:
🛑 Point-of-Sale Credit: Before 2024, you had to wait until tax season to get your credit. Now, you get it immediately at the dealership.
🚗 Sales Caps Removed: Before 2023, automakers like Tesla and GM were phased out after hitting 200,000 EV sales. Now, all manufacturers can qualify if their vehicles meet the new requirements.
♻️ Used EV Credit: Before 2023, no tax credit was available for used EVs. Now, you can get up to $4,000 for a qualifying pre-owned EV.
💰 Income Restrictions Introduced: Before 2023, anyone could claim the EV tax credit. Now, the income limits target middle- and lower-income buyers.
🔋 Stricter Battery & Sourcing Rules: To get the full $7,500 credit, vehicles must meet phased-in rules requiring battery materials to be sourced from the U.S. or allied nations
Final Thoughts: Is It Still Worth It?
The 2025 EV tax credit is still a great way to save money on an electric vehicle—especially if you meet the income limits and choose a qualifying car. The instant discount at the dealership makes EVs more affordable upfront, but be sure to check that your vehicle meets the stricter battery and sourcing rules!
Thinking about making the switch? Let me know in the comments. Are these new tax credits a deal-breaker, or are you still excited about going electric?
Get Your Free Estimate
If you don’t already know me, my name’s Sonia Narvaez. I’m a licensed CPA and wealth building strategist with over 25 years experience.
And if you have any questions about how to take advantage of any of these tax savings strategies, book your FREE estimate with a member of my team, simply click this scheduling link, and pick the time that works best for you.
We would love to help and meet with you.