As interest in electric vehicles (EVs) continues to grow, potential buyers should be aware of a looming deadline: federal tax credits worth up to $7,500 for new EVs and $4,000 for used ones may be subject to significant changes after September 30.
Automakers, consumers, and dealerships have largely operated under the assumption that signing a purchase contract before the September 30 deadline secures the existing credits. However, that assumption is now in question, with some manufacturers acknowledging that the IRS has yet to confirm whether contract dates will, in fact, determine eligibility.
“It is our understanding that a signed contract is required to qualify for the federal tax credit, and that the contract date serves as the determining factor,” a Honda spokesperson told Gizmodo. “But the government is still finalizing the rules.”
Without clear direction from the Treasury Department or IRS, buyers are being asked to make major financial decisions amid considerable uncertainty—just as the EV market gains critical momentum.
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What’s Actually at Stake?
The Inflation Reduction Act introduced a robust set of incentives aimed at accelerating electric vehicle adoption, including:
- Up to $7,500 in tax credits for qualifying new EVs
- A $4,000 credit for eligible used EVs priced under $25,000
- Income eligibility limits for buyers
- Strict requirements around final assembly and battery sourcing
These incentives have played a significant role in making EVs more affordable for consumers. But they also come with detailed eligibility rules—and those rules may soon shift.
September 30 has emerged as an informal deadline, based on early interpretations of the legislation. Many in the industry assumed that as long as a purchase contract was signed by that date, the buyer’s eligibility would be locked in, regardless of when the vehicle is delivered. Now, that assumption appears to be in flux, raising uncertainty for both consumers and sellers.
Automakers Stay Quiet as Consumers Scramble
As uncertainty mounts, automakers have largely remained silent, leaving consumers with more questions than answers. When Gizmodo reached out to several manufacturers for clarification, most simply pointed to the IRS website and declined to elaborate beyond their current offers.
Nissan, for example, confirmed that models like the Ariya and the new LEAF—both manufactured in Japan—do not qualify under the existing rules. As for what happens after September 30, the company had little to offer.
“We can only provide information on our current offers,” a Nissan spokesperson said. “At this time, we don’t have anything to share regarding additional incentives or rebates.”
This lack of guidance has contributed to widespread confusion among buyers. Many still believe that all EVs automatically qualify for tax credits, but that’s far from the truth. Most foreign-made vehicles don’t meet the criteria, and even some U.S.-assembled models may only receive partial credits depending on where their battery components are sourced.
The IRS did not respond to a request for comment, further deepening the information gap at a critical moment for consumers weighing a major purchase.
What About Used EVs?
While the spotlight often falls on incentives for new electric vehicles, the Inflation Reduction Act also includes a valuable—but lesser-known—tax credit of up to $4,000 for used EV purchases. To qualify, the vehicle must meet the following criteria:
- Priced under $25,000
- Purchased through a licensed dealer (not a private sale)
- At least two model years old
- Buyer must meet income eligibility thresholds
However, like the new vehicle credit, the used EV incentive could be subject to changes after September 30, depending on how regulatory guidance evolves.
Act—But With Caution
This moment is all about timing. For potential EV buyers, even a brief delay could mean the difference between receiving a substantial federal credit—or receiving nothing at all.
With the Treasury Department and IRS still finalizing the rules, the safest course of action is to stay informed and, if possible, sign a purchase contract before September 30. Waiting could mean missing not just a tax break, but the entire window of opportunity.
Frequently Asked Questions
What is the federal tax credit for new electric vehicles?
Eligible buyers can receive up to $7,500 in federal tax credits for qualifying new electric vehicles, depending on the vehicle’s assembly location, battery sourcing, and the buyer’s income.
Is there a tax credit for used EVs?
Yes. Qualified buyers can receive a $4,000 credit for used EVs priced under $25,000, as long as the purchase is made through a dealer and the vehicle is at least two model years old.
Who qualifies for these EV tax credits?
There are income limits for both new and used EV credits. Additionally, only vehicles meeting final assembly and battery sourcing requirements are eligible. Used vehicles must be sold by a dealer and meet price and age limits.
What’s happening on September 30?
While not an official government deadline, September 30 has become an unofficial cutoff based on how the law was originally interpreted. Many believed a signed contract before this date would lock in current credit eligibility, but that assumption is now uncertain.
Will a signed contract before September 30 guarantee the tax credit?
Not necessarily. Although automakers and buyers previously operated under that belief, the IRS has not confirmed that a signed contract will secure eligibility under the current rules. Final guidance is still pending.
What vehicles qualify for the credit?
Only certain makes and models qualify based on where they are assembled and where their battery materials come from. Most foreign-made vehicles are excluded, and even some U.S.-assembled EVs may qualify only partially. Always check the IRS’s list of eligible vehicles.
Conclusion
The federal EV tax credit system has been a key driver in making electric vehicles more accessible—but it’s currently clouded by regulatory uncertainty. With possible changes coming after September 30, buyers face a narrowing window to take advantage of these incentives.
If you’re planning to purchase an electric vehicle, the best approach is to act quickly but thoughtfully. Review your eligibility, confirm whether the vehicle qualifies, and—if possible—secure your contract before the deadline.