Rules for a $7,500 tax break for electric vehicle purchases and leases recently changed, but more far-reaching changes are expected when President-elect Donald J. Trump takes office.
Sales of electric vehicles have been rising steadily over the past few years, in part because of a federal tax credit of up to $7,500 that makes buying such cars and trucks more affordable.
But understanding which cars it applies to and under what circumstances can be confusing. And all of those rules could change drastically under the incoming Trump administration; President-elect Donald J. Trump and Republicans have promised to repeal or scale back the incentives.
The tax credit was designed to bring the cost of buying or leasing electric vehicles closer to the cost of comparable gasoline models, helping to address climate change. The rules governing the credit are also meant to push automakers to produce those vehicles and their batteries in the United States and reduce the industry’s reliance on China for critical components.
The policy has had an effect. Several automakers have increased domestic manufacturing, and sales are up 7.3 percent from 2023 — to 1.3 million vehicles, according to Cox Automotive, a research firm.
Here is what to know about how the credits work, and how they might change.
Which cars qualify for a tax credit?
At least 15 vehicles from the 2025 model year qualify for the full $7,500 credit. The list is here.
Purchased or leased electric vehicles that meet certain requirements, including where the vehicles are assembled and where crucial materials for their batteries come from, are eligible for the tax credit. The incentive was part of the Inflation Reduction Act signed into law by President Biden in 2022.