Don’t Miss Out: Federal Electric Vehicle Tax Credits Expire September 30, 2025

Electric vehicles (Es) are no longer futuristic concepts, they are in driveways, office parking lots, and highways all across Florida. But one of the biggest reasons many households and businesses have made the switch is about to end: the federal EV tax credit, also known as the Clean Vehicle Credit.

This incentive, worth up to $7,500 per vehicle, will expire for vehicles acquired after September 30, 2025. That date may feel far away, but in the world of car buying, production schedules, and supply chains, waiting until the last minute can mean missing out.

At AnidjarLaw, our focus is to help clients in Hollywood, Broward County, and across Florida understand how tax incentives like this work, how to qualify, and how to avoid costly mistakes before the program sunsets.

Not all EVs qualify. To be eligible:

1. Manufacturer Requirements
   The vehicle must be from a qualified manufacturer approved by the IRS. Major brands like Tesla, Ford, General Motors, and Rivian currently qualify for certain models.
2. Weight Limit
   The car or truck must weigh less than 14,000 pounds. This covers most passenger cars and light-duty trucks.
3. Battery Size
   Must have at least a 7 kilowatt-hour battery, rechargeable from an external source. Regular hybrids do not qualify, only plug-in hybrids (PHEVs) and fully electric vehicles.
4. Final Assembly in North America
   Vehicles assembled outside North America do not qualify. For example:
   • ✅ Ford F-150 Lightning (assembled in Michigan), qualifies.
   • ❌ Hyundai Ioniq 5 (assembled in South Korea), does not qualify.
5. Price Caps
   • Sedans: $55,000 max.
   • SUVs, vans, trucks: $80,000 max.

   This means luxury EVs like the Lucid Air ($87,000+) are excluded.

For the first time, buying a used EV can also bring tax benefits.

• Credit size: 30% of the price, up to $4,000.
• Requirements:
  • Vehicle must be at least 2 years old.
  • Sale price must be under $25,000.
  • Vehicle must be purchased from a dealer (not a private sale).
• Income limits:
  • $75,000 single.
  • $112,500 head of household.
  • $150,000 married filing jointly.

Example

• If you buy a 2019 Chevy Bolt for $18,000, you can claim a $4,000 credit (since 30% of $18,000 = $5,400, but the cap is $4,000).

This opens doors for middle income households who might not be able to afford a new Tesla or Rivian.

Leasing an electric vehicle comes with unique advantages when it comes to the federal EV tax credit. While the rules for purchasing a vehicle are tied to your personal income, leasing operates differently:

1. Who Gets the Credit in a Lease?
   • When you lease an EV, the leasing company (lessor) is considered the legal owner of the vehicle.
   • That means the leasing company, not the consumer, claims the federal EV tax credit on its tax return.
2. How Do You Benefit as the Lessee?
3. Many dealerships and leasing companies pass along the value of the credit to the customer by reducing the monthly lease payment or lowering the upfront cost (the capitalized cost of the lease).
4. Example: If a leasing company claims the $7,500 credit, they may structure the lease so that your monthly payment is $200–$250 less.
5. Why Leasing Can Be More Flexible
   • No income restrictions: Unlike purchases, leasing does not require the lessee to meet the $150,000/$225,000/$300,000 income caps. Even high-income earners can benefit indirectly when the dealership lowers payments.
   • Luxury models benefit too: Price caps ($55,000 sedan / $80,000 SUV) do not apply to leases in the same way. This means certain higher-priced EVs (like the BMW iX or Mercedes EQS SUV) may be more affordable through leasing.
   • Shorter commitments: Leasing allows drivers to test EV ownership without committing long-term. This is valuable as technology, charging infrastructure, and battery ranges continue to evolve.
6. Dealer Incentives & Added Benefits
   • Dealers eager to promote EVs may combine the federal credit with manufacturer lease specials, stacking additional savings.
   • Example: A dealer may advertise a lease with “$7,500 bonus cash” upfront, that’s the federal credit being applied directly to your lease deal.
   • In some cases, leasing may offer the most predictable savings, especially if battery component sourcing rules change and disqualify certain vehicles in the future.

Real World Example

• A Tesla Model Y that costs $55,000 may not qualify for a high-income earner buying it outright due to income restrictions.
• But if that same individual leases the Model Y, the leasing company applies the $7,500 credit and reduces the payment, allowing the driver to enjoy the benefit even if their personal income exceeds IRS thresholds.

One of the most common questions drivers ask is whether the Clean Vehicle Credit will truly end on September 30, 2025, or if Congress may act to extend it. The reality is that while the credit is scheduled to expire, it is not uncommon for lawmakers to revisit popular tax incentives.

Factors That Could Lead to Renewal or Replacement

1. Public Demand and Consumer Adoption
   If EV sales drop sharply after the credit expires, Congress may consider reinstating the program to keep momentum going.
2. Environmental Policy Goals
   The federal government has set ambitious climate goals, including reducing carbon emissions and expanding clean energy. Continuing EV incentives could be an important part of meeting those goals.
3. Industry Lobbying
   Automakers and energy companies have a strong interest in keeping EVs affordable. Pressure from these industries could drive lawmakers to design new credits, rebates, or grants.
4. Election Cycles
   Tax incentives often become a political talking point during elections. Depending on the political climate in 2026 and beyond, EV tax credits may return in a new form.

What History Tells Us

Tax incentives for clean energy are often phased out and then reintroduced in different ways. For example:

• Solar panel credits were set to expire multiple times but were extended or reshaped by Congress.
• Previous EV credit programs have also evolved, shifting from manufacturer-specific phase-outs to broader clean vehicle credits under current law.

What Consumers Should Do

While there is a chance the credit could come back, there are no guarantees. Relying on future legislation is risky. If buying or leasing an EV makes financial sense for you now, taking advantage of the guaranteed credit through September 30, 2025 is the safest approach.