Changes to the EV tax credit in 2024 allow an immediate discount on an EV purchase – but there are additional requirements that shorten the list of eligible EVs.

The Clean Vehicle Tax Credit – up to $7,500 for electric vehicles – can now be used at the point of sale like an instant rebate.

Effective this year, the changes may help steer more potential buyers toward EVs and away from gas-powered vehicles. “The tax credit – most Americans still aren’t aware of it,” said Loren McDonald, CEO of the analyst firm EVAdoption. “That’s why the point of sale [change] is important.”

But as of early 2024, the changes are a bit of a mixed bag for consumers. While the changes do mean you can save money immediately on an EV purchase versus waiting for your tax return, it limits your EV options, too. Price caps, income requirements, dealership participation and battery sourcing requirements have caused the 2024 list of eligible EVs to shrink – at least for now.