2025 EV tax credit requirements (all must be met): (1) Final assembly in North America (US, Canada, Mexico). (2) MSRP limits: Cars/sedans under $55,000, SUVs/trucks/vans under $80,000. (3) Battery components: 60% North American value (2025 requirement, up from 50% in 2024). (4) Critical minerals: 50% from US/FTA countries (up from 40% in 2024). (5) Income limits: $150k single, $225k head of household, $300k joint (modified AGI). (6) New vehicle only for $7,500 credit.

Qualifying vehicles 2025 (partial list - verify with IRS): Tesla Model 3 RWD ($42k MSRP) ✅ $7,500, Chevy Equinox EV ($35k) ✅ $7,500, Ford F-150 Lightning ($70k) ✅ $7,500, Volkswagen ID.4 ($45k) ✅ $3,750 (partial - battery sourcing).

Non-qualifying: BMW, Mercedes, Audi EVs (foreign assembly), Tesla Model S/X (MSRP too high), some Hyundai/Kia models (battery sourcing issues).

Check fueleconomy.gov for updated qualifying list.

Starting 2024 (continuing 2025), buyers can transfer tax credit to dealer for instant discount at purchase instead of waiting for tax refund.

Process: (1) Verify eligibility at point of sale (dealer confirms vehicle qualifies, buyer meets income limits). (2) Assign credit to dealer (sign IRS transfer form). (3) Receive immediate price reduction (dealer reduces purchase price by credit amount $3,750-$7,500). (4) Dealer claims credit from IRS (not buyer responsibility).

Benefits vs traditional tax credit: Get discount immediately (don't wait for tax filing), works even if tax liability less than $7,500 (dealer gets full credit), simplifies purchase (no tax paperwork for buyer).

Important: Income verification required upfront (provide recent tax returns), credit amount locked at sale (can't change if income changes), dealer participation optional (not all dealers offer point-of-sale transfer).

Example: $50,000 EV qualifying for $7,500 credit.

Traditional: Pay $50k, claim $7,500 on 2025 tax return (filed April 2026).

Point-of-sale: Pay $42,500 at purchase ($7,500 instant discount), dealer handles IRS claim.