In an era where climate goals, energy independence, and consumer incentives align, the Inflation Reduction Act (IRA) has become a cornerstone of U.S. electric vehicle (EV) policy. Since it passed in 2022, the IRA has incentivized American car buyers to go electric through up to $7,500 in tax credits. But with several phased implementation changes, the playing field keeps shifting.
As of April 2025, new sourcing and component origin requirements are reshaping which EVs still qualify for these federal benefits. For many consumers, the big question now is: Which EVs remain eligible for the IRA tax credit after April 2025?
This article breaks down the current rules, the list of qualifying models, buyer income limits, and the bigger picture behind this evolving policy.
Understanding the IRA EV Tax Credit: A Recap
The Inflation Reduction Act’s Clean Vehicle Credit is not a flat incentive for every EV—it’s a structured policy with detailed criteria for:
- Where the vehicle is assembled
- Where battery minerals are sourced
- Where battery components are manufactured
- Buyer income limits
- Price caps on vehicles
🧩 Breakdown of the $7,500 Credit
| Component | Amount | Requirement |
|---|---|---|
| Critical minerals | $3,750 | A minimum percentage of minerals must come from the U.S. or free trade agreement countries. |
| Battery components | $3,750 | Battery parts must be made or assembled in North America. |
April 2025: What Changed?
As of April 2025, the U.S. Treasury and IRS have enforced stricter sourcing rules:
- No critical minerals or components can originate from “foreign entities of concern” (FEOC), which includes countries like China.
- Increased percentage thresholds for domestic or FTA-sourced minerals and battery components.
- EVs using batteries or minerals from non-compliant sources are disqualified, even if assembled in the U.S.
These updates drastically reduced the number of qualifying vehicles—particularly affecting automakers who rely on Chinese battery supply chains.
Current List of EVs That Still Qualify (As of April–July 2025)
Here’s an updated list of EVs and PHEVs that continue to qualify for the IRA Clean Vehicle Credit as of the latest Treasury Department update. Only models that meet both battery component and mineral content requirements are eligible for the full $7,500.
| Manufacturer | Model | Credit Amount | Notes |
|---|---|---|---|
| Tesla | Model Y Long Range | $7,500 | U.S.-assembled with compliant battery sourcing |
| Ford | F-150 Lightning (certain trims) | $7,500 | Only models with updated 2025 battery chemistry |
| Chevrolet | Equinox EV | $7,500 | New production models qualify fully |
| Chevrolet | Silverado EV WT | $7,500 | Only fleet versions eligible currently |
| Rivian | R1T & R1S (Dual-Motor trims) | $3,750 | Partial credit; awaiting battery plant upgrades |
| Lucid Motors | Lucid Air Pure | $3,750 | Assembly qualifies, but mineral sourcing still partial |
| Volkswagen | ID.4 | $7,500 | Only U.S.-assembled units (Chattanooga, TN) |
| Jeep | Wrangler 4xe | $3,750 | Battery sourcing partially compliant |
| Cadillac | LYRIQ (certain trims) | $7,500 | Fully compliant as of May 2025 production run |
🚨 Note: Always check the IRS EV eligibility site before purchasing, as automaker compliance updates monthly.
EVs No Longer Eligible After April 2025
Some popular models lost eligibility due to the new foreign content restrictions, including:
- Hyundai Ioniq 5 and 6 (assembled in Korea)
- Kia EV6 (South Korean assembly)
- BMW i4 and iX (battery minerals sourced from China)
- Nissan Ariya (Japan-based assembly and batteries)
- Volvo EX30 and Polestar 2 (reliant on Chinese supply chains)
While these vehicles may still qualify for state-level or leasing-based incentives, they no longer meet federal purchase credit requirements.
EV Leasing: The Backdoor to the Credit
While many buyers may be disappointed by reduced eligibility, there’s a loophole that still offers hope: leasing.
Under the Commercial Clean Vehicle Credit, leasing companies can pass on up to $7,500 in savings even if the vehicle doesn’t qualify under consumer criteria.
📌 Why Leasing Works
- Leasing companies claim the credit and may reduce the capitalized cost
- Country of assembly and FEOC sourcing rules are waived
- Applies to foreign brands like Hyundai, BMW, Kia, and Mercedes
If you’re interested in a disqualified EV, leasing is a viable and often cheaper alternative with tax savings built into your monthly payments.
Buyer Eligibility: Not Everyone Qualifies
In addition to the vehicle requirements, buyers must meet income and vehicle price limits to claim the tax credit.
🧾 Income Limits
| Filing Status | Max Adjusted Gross Income (AGI) |
|---|---|
| Single | $150,000 |
| Head of Household | $225,000 |
| Married Filing Jointly | $300,000 |
🚘 Vehicle Price Caps
- SUVs, trucks, vans: Must cost under $80,000
- Sedans, hatchbacks: Must cost under $55,000
How to Claim the Tax Credit in 2025
As of 2024 and continuing into 2025, buyers can now transfer the tax credit directly to the dealer at point-of-sale, effectively turning it into an instant discount.
🛠 Steps to Claim:
- Ensure vehicle is listed on the IRS approved list.
- Confirm income eligibility.
- Request credit transfer at a participating dealer.
- Dealer deducts the credit from sale price.
- IRS reimburses the dealer, and you receive no credit at tax time.
This streamlined process makes the benefit immediate—no waiting until tax season.
FAQs: IRA EV Tax Credits After April 2025
Do used EVs still qualify for tax credits?
Yes. Used EVs can qualify for up to $4,000 under separate rules. The vehicle must be at least 2 years old, cost under $25,000, and meet certain ownership and income criteria.
Can I still claim a tax credit if I lease a foreign EV?
Yes. Leasing falls under the commercial EV credit, which doesn’t follow FEOC or final assembly rules. The dealership or leasing company can pass on the credit as a lease discount.
What are “foreign entities of concern”?
These are companies or countries identified as adversarial to U.S. interests, such as China, Russia, Iran, or North Korea. Any battery minerals or parts sourced from these entities disqualify the vehicle from tax credit eligibility.
How often does the eligibility list change?
The IRS updates the eligible vehicle list monthly. Manufacturers must certify compliance with mineral and component sourcing every quarter. Always check the IRS website before purchase.
Will more EVs regain eligibility later in 2025?
Yes. Automakers like GM, Ford, and Rivian are retooling battery supply chains to meet FEOC compliance. Expect more eligible models as new domestic or allied battery factories come online throughout late 2025 and 2026.
Conclusion: Be an Informed Buyer in the New EV Incentive Era
Navigating the world of EV tax credits in 2025 is more complex than ever. But the key takeaway is clear: compliance pays—for automakers and consumers alike. With more strict sourcing rules now in effect, only a limited group of vehicles qualify, but this could change as new battery production and supply chains evolve.
Before making a purchase, always verify eligibility, consider leasing for ineligible vehicles, and work with a knowledgeable dealership that understands how to apply the credit at the point of sale.
By staying informed and flexible, you can still take full advantage of the government’s push toward electrified transportation—and save thousands in the process.