There are several rules about which EVs, fuel-cell vehicles, and PHEVs qualify:
• The car’s model year must be at least two years older than the current calendar year. That means in 2024, cars up to the 2022 model year are eligible. Only model year matters—not the year a car was first sold or registered.
• The car cannot have a sale price of more than $25,000, not including taxes and fees.
• Any car that has already been resold to a qualified buyer after Aug. 16, 2022 (the date the IRA went into effect), is no longer eligible for a tax credit. This is called the “first transfer” rule, and it is intended to prevent cars from being purchased and resold by individuals solely for the purpose of claiming tax credits (dealer transfers don’t count), says Chris Harto, CR’s senior policy analyst for transportation. But the way the law is written severely restricts which vehicles will ever qualify, he says. It might also make it difficult to determine how much a disqualified vehicle should cost compared with one that qualifies for the credit, especially as dealerships factor the tax credit into advertised prices.
