$7,500 Federal EV Credit Ending Soon: How Buyers Can Still Qualify

However, the IRS has confirmed that shoppers can still lock in the benefit if they sign a binding contract and make a payment before the deadline—even if delivery happens later. Automakers, such as Tesla, Ford, and GM, are working diligently to inform customers about the deadline so they can still qualify for the EV credits.

Contract signing secures eligibility

The EV credit was restructured as the Clean Vehicle Credit under the Inflation Reduction Act of 2022, enacted during the Biden Administration. The tax benefits were originally set to run through 2032.

However, the Trump Administration’s One Big Beautiful Bill Act (OBBB) included provisions that cut the program short. Automakers initially believed both contract and delivery had to occur before Sept. 30, which left many buyers worried about supply and shipping delays.

The new IRS guidance clarifies that a written purchase agreement, paired with a deposit, trade-in, or down payment, is sufficient to preserve eligibility. Buyers should keep records, including the signed contract and proof of payment, to ensure that the credit is applied correctly. Without this step, those relying solely on promotional zero-down financing may miss out on this opportunity.

Eligibility limits and leasing option

The Clean Vehicle Credit includes strict requirements. For instance, new EVs must be assembled in North America and meet sourcing thresholds for battery materials. Plus, price caps apply at $80,000 for SUVs, vans, and pickups, and $55,000 for sedans and other passenger cars. Meanwhile, used EVs must be at least two model years old and priced at $25,000 or less.

Income caps also apply, such as $300,000 for joint filers and $150,000 for single filers on new EVs, while used EV purchases are capped at $150,000 and $75,000, respectively.

For buyers who are unable to qualify under these limits, leasing remains a viable alternative. Since leases are treated as commercial transactions, they’re exempt from sourcing and income restrictions, allowing dealers to apply the $7,500 savings upfront on nearly any EV.

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