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Inflation Reduction Act: Vehicles

Green Your Commute and Accelerate the Clean Energy Transition

The Inflation Reduction Act (IRA) tax credits lower the cost of purchasing a new or used electric vehicle (EV) – both battery-electric and plug-in hybrid models – including cars, pick-up trucks, SUVs, and vans.

Increasing EV ownership is critical to reducing greenhouse gas emissions and meeting New York’s climate goals. For drivers and fleet managers, EVs also bring reduced maintenance and operation costs compared to gas-powered vehicles, saving money and hassle for drivers and commercial fleets. The convenience of home and onsite charging, plus New York’s rapidly growing charging infrastructure, make EVs a solution for daily commutes and longer trips.

How Much Could You Save on an Electric Vehicle?

Combined, the IRA tax credit and New York’s Drive Clean Rebate can save New York residents up to $9,500 on a selection of new EV models.

Personal Vehicles

Eligible Technology Federal IRA Tax Credit
2023-2032
New York State Incentives
and Tax Credits
New Electric Vehicle Up to $7,500 for eligible buyers of qualified clean vehicles* Up to $2,000 rebate for purchased or leased eligible vehicle
Used Electric Vehicle 30% of the sale price up to $4,000 for eligible buyers of qualified, previously owned clean vehicles  
Home Electric Vehicle Charger 30% of cost, up to $1,000**  
*For EVs placed in service January 1 to April 17, 2023, the tax credit is calculated from a base amount of $2,500, plus $417 for a vehicle with at least 7 kilowatt hours of battery capacity and an additional $417 for each kilowatt hour of battery capacity beyond 5 kilowatt hours. For example, an EV with 7 kilowatt hours of battery capacity would receive a credit of $3,751 ($2,500 + 3 times $417).
**The IRS will soon publish further information on eligibility requirements related to home electric vehicle chargers, however credits are intended for residents in non-urban or low-income communities.

Commercial Vehicles

Eligible Technology Federal IRA Tax Credit
2023-2032
New York State Incentives
and Tax Credits
Plug-in Hybrid Electric Vehicles Up to 15% of cost for qualified clean vehicles* Up to $2,000 rebate for purchased or leased eligible vehicle
Battery-Electric or Fuel Cell Electric Vehicles Up to 30% of cost for qualified clean vehicles* Up to $2,000 rebate for purchased or leased eligible vehicle
*IRA tax credits may not exceed $7,500 for vehicles under 14,000 lbs. and $40,000 for vehicles above 14,000 lbs.

Which Electric Vehicles Are Eligible for IRA Tax Credits?

Whether an EV qualifies depends on several factors, including the manufacturer, vehicle design, price, where it’s assembled, where battery components are sourced, and more.

New Personal Vehicle Eligibility Requirements:

  • Design: EVs must have a battery capacity of at least 7 kilowatt hours and a gross vehicle weight rating of less than 14,000 pounds.
  • Manufactured Suggested Retail Price (MSRP): The MSRP for vans, SUVs, and pick-up trucks cannot exceed $80,000 to be IRA eligible. The MSRP limit is $55,000 for other types of EVs, such as sedans.
  • Final Assembly: EVs must undergo final assembly in North America to be eligible.
  • Mineral and Battery Components: If an EV meets both the critical minerals and battery component requirements, it may be eligible for the full $7,500 tax credit. If it meets just one of the sourcing requirements, it may be eligible for a $3,750 tax credit.

Check if an EV model is eligible for the new clean vehicle tax credit at fueleconomy.gov Link opens in new window - close new window to return to this page..

Learn more about tax credits for new clean vehicles on the IRS website Link opens in new window - close new window to return to this page..

Used Personal Vehicle Eligibility Requirements:

  • Manufacturer: Used EVs must be listed on the IRS Index of Qualified Manufacturers Link opens in new window - close new window to return to this page..
  • MSRP: To qualify, used EVs must have a sale price of $25,000 or less.
  • Model Year: Used EVs must have a model year at least two years earlier than the calendar year purchased to qualify.
  • Dealership: Used EVs must be purchased from a dealer licensed to sell motor vehicles.

Learn more about the used clean vehicle tax credit on the IRS website Link opens in new window - close new window to return to this page..

Commercial Vehicle Eligibility Requirements:

  • Manufacturer: Commercial EVs must be listed on the IRS Index of Qualified ManufacturersLink opens in new window - close new window to return to this page..
  • Design: To qualify, EVs must have a battery capacity of at least 7 kilowatt hours if the gross vehicle weight rating (GWWR) is under 14,000 pounds and at least 15 kilowatt hours if the GWWR is 14,000 pounds or more. Fuel cell vehicles must satisfy the requirements of IRC 30B(b)(3)(A) and (B)Link opens in new window - close new window to return to this page.
  • Purpose: Commercial EVs must be used for business activities.

There is no limit on the number of credits your business can claim for commercial electric vehicles.

Learn more about the commercial clean vehicle tax credit on the IRS website Link opens in new window - close new window to return to this page..

Which Electric Vehicles Qualify for IRA Tax Credits and NYS Rebates?

New York residents may be eligible to combine IRA tax credits with the Drive Clean Rebate when they purchase certain new EV models. The table below lists EV models that qualify for both the IRA tax credit and Drive Clean Rebate.

Some manufacturers have yet to submit information on eligible EV models that meet the IRA requirements. This list will continue to be updated as eligible EVs are added.

New York drivers can also browse the full list of Drive Clean Rebate eligible models and IRA eligibleLink opens in new window - close new window to return to this page. models to get a comprehensive view of their options for EV savings.

Eligible New EV Models IRA Tax Credit Amount NYS Drive Clean Rebate Amount
BMW X5 xDrive50e 2024 $3,750 $500
Cadillac Lyriq 2023-2024  $7,500 $500
Chevrolet Bolt & Bolt EUV 2022-2023  $7,500 $2,000
Chrysler Pacifica PHEV 2022-2023 $7,500  $500
Ford Escape Plug-in Hybrid 2022-2023 $3,750  $500
Ford F-150 Lightning 22-23 (standard and extended range battery)  $7,500 $500
Ford Mustang Mach-E 22-23 (standard and extended range battery) $3,750 $500
Jeep Grand Cherokee PHEV 4xe 2022-2023  $3,750 $500
Jeep Wrangler PHEV 4xe 22-23 $3,750 $500
Lincoln Aviator Grand Touring 22-23 $7,500 $500
Lincoln Corsair Grand touring 22-23 $3,750 $500
Tesla Model 3 Performance 22-23 $7,500 $500
Tesla Model 3 Standard Range Rear Wheel Drive 22-23 $3,750 $500
Tesla Model Y (Performance, All-Wheel Drive, and Long Range All Wheel-Drive) 22-23  $7,500 $500
Volkswagen ID.4 AWD (Pro, Pro S, and Pro S Plus) 2023 $7,500 $500
Volkswagen ID.4 Pro, Pro S, and Pro S Plus 2023  $7,500 $500
Volkswagen ID.4 Standard 2023 $7,500 $2,000

How to Claim IRA Tax Credits and Save

The IRA makes it easier for many New York drivers and businesses to purchase clean vehicle technologies, including battery-electric, plug-in hybrid, and fuel cell electric vehicles.

Here’s how to claim tax credits if you’re purchasing a new, used, or commercial EV:

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