Beatrice Lang
Electric vehicles are becoming increasingly popular, and with the recent push for eco-friendly initiatives, governments are incentivizing consumers to make the switch. In the United States, federal tax credits of up to $7,500 are available for those who purchase electric vehicles. However, this credit was previously unavailable for Hyundai electric vehicles due to manufacturing requirements. So, do Hyundai electric vehicles qualify for tax credits now?
Do Hyundai Electric Vehicles qualify for tax credit?
| Characteristics | Values |
|---|---|
| Federal tax credit availability | Yes, as of January 2024 |
| Amount | Up to $7,500 |
| Qualifying models | Hyundai Ioniq 5, Hyundai Santa Cruz, Hyundai Tucson |
| Requirements | Vehicles must be manufactured in North America, have an MSRP below $80,000 for an SUV and $55,000 for a sedan, wagon, or hatchback, and meet specific criteria for battery component sourcing |
| Leasing | Leasing options will be simplified in 2024, allowing dealers to apply the incentive as an upfront discount |
| Income limits | Modified adjusted gross income of $150,000 for a single filer or $300,000 for a married couple filing jointly |
| Other incentives | Sid Dillon Hyundai offers new vehicle specials and used vehicle specials to lower the final price |
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What You'll Learn
Electric Hyundai models that are eligible
The availability of tax credits for Hyundai electric vehicles (EVs) is a recent development. Previously, Hyundai EVs did not qualify for tax credits due to manufacturing requirements. Specifically, the Inflation Reduction Act mandates that vehicles must be built in North America, which excluded Hyundai's South Korean factories. However, with Hyundai's new $7.6 billion EV manufacturing plant in Georgia, their electric models now qualify for full tax credits.
The tax credit available for eligible Hyundai EVs is up to $7,500, which can significantly reduce the cost of purchasing an electric vehicle. This credit is part of the Clean Vehicle Tax Credit program, which aims to encourage consumers to switch to electric vehicles and support eco-friendly initiatives. The program has specific requirements that vehicles must meet to qualify for the tax credit, including price caps and income thresholds for buyers.
It is important to note that the availability of tax credits for EVs may change in the future due to potential policy changes. Additionally, the process of claiming the tax credit may vary, and it is essential to review the specific guidelines provided by the relevant authorities.
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Conditions to meet for the tax credit
Hyundai electric vehicles (EVs) have not always been eligible for tax credits due to manufacturing requirements. However, as of 2025, select Hyundai models qualify for the federal EV tax credit. This change occurred when Hyundai opened a new EV manufacturing plant in Georgia, enabling their vehicles to meet the requirement that EVs must be built in North America.
To meet the conditions for the tax credit, you must purchase an eligible EV model, such as the Hyundai Ioniq 5 or the 2025 Hyundai Ioniq 5 N. The vehicle must also meet specific criteria for battery component sourcing. The tax credit is available for vehicles placed in service in 2023 or later.
The vehicle's manufacturer suggested retail price (MSRP) must not exceed $80,000 for vans, sport utility vehicles (SUVs), and pickup trucks. For a sedan, wagon, or hatchback, the MSRP must be below $55,000. These price caps are based on guidance from the Internal Revenue Service.
Your annual income must not exceed the thresholds set by the program, which are $150,000 for a single filer and $300,000 for a married couple filing jointly.
If you are leasing an EV, the dealer would receive the commercial credit. It is then up to the dealer to pass on these savings to the consumer, potentially by lowering the vehicle's purchase price.
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Amount of money that can be claimed back
The amount of money that can be claimed back depends on several factors. The federal tax credit for purchasing an electric vehicle (EV) is worth up to $7,500. This is a significant saving that can make a big dent in the price of a car. The minimum credit is $3,750, and this applies if the vehicle meets either the critical minerals or battery components requirement. The Clean Vehicle Tax Credit is a valuable incentive for switching to electric vehicles, and it is offered to encourage Americans to buy EVs and promote a cleaner environment.
However, it's important to note that the tax credit may not be available for all EV purchases. The credit depends on factors such as where the EV is made, where its battery components and minerals come from, how much it costs, and how much the buyer earns. For example, the vehicle must be manufactured in North America and have a manufacturer suggested retail price (MSRP) below $80,000 for an SUV, van, sport utility vehicle, or pickup truck, and $55,000 for a sedan, wagon, or hatchback.
In the case of leasing an EV, the dealer would receive the commercial credit, and it would be up to them to pass those savings on to the consumer, potentially by lowering the vehicle's purchase price. If a dealer does pass the savings along, drivers could get a tax credit on a car made outside North America, such as the Hyundai Ioniq 5. High-income consumers and those who lease a high-cost EV would also be able to enjoy the $7,500 credit as long as the dealer passes those savings along.
While Hyundai electric vehicles did not qualify for the EV tax credit on new vehicles in the past, this has changed with the opening of Hyundai's new EV manufacturing plant in Georgia. Now, select Hyundai, Kia, and Genesis electric models qualify for the full $7,500 tax credit.
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How to apply for the tax credit
If you're looking to apply for a tax credit for your Hyundai electric vehicle, there are a few things to keep in mind. Firstly, it's important to note that Hyundai electric vehicles did not qualify for EV tax credits on new vehicles in 2024 due to manufacturing requirements. However, starting in 2024, leasing options have been simplified, allowing dealers to apply incentives as upfront discounts, and some Hyundai dealerships may offer used EV tax credits. Additionally, Hyundai has lowered its prices on electric vehicles to make them more competitive with gasoline-powered vehicles.
Here's a step-by-step guide on how to apply for the tax credit:
- Confirm Eligibility: Before applying, ensure that your specific Hyundai electric vehicle model qualifies for the tax credit. Check with your Hyundai dealership to verify if your vehicle is eligible for any incentives or tax credits.
- Understand the Requirements: The tax credit requirements can vary, but generally, the vehicle must be manufactured in North America and meet specific criteria for battery component sourcing. There may also be income thresholds and price caps on the vehicles purchased to be eligible for the tax credit.
- Review Dealership Discounts: Starting in 2024, dealerships can apply the incentive as an upfront discount, making it easier to claim your savings. Contact your Hyundai dealership to discuss any available discounts or incentives they may offer.
- Income and Price Considerations: To be eligible for the tax credit, your annual income must not exceed the thresholds set by the program. Additionally, the vehicle's manufacturer suggested retail price (MSRP) must not exceed certain limits, which vary depending on the type of vehicle.
- Gather Necessary Information: When applying for the tax credit, you will need to provide specific information. This includes your name, taxpayer identification number, vehicle identification number (VIN), and other relevant details. Ensure you have all the required documentation before initiating the application process.
- Complete the Application: The process for applying for the tax credit may vary depending on your specific location and circumstances. In the United States, for instance, you would typically file Form 8936, Clean Vehicle Credits, with your tax return. Consult official government sources or tax professionals for detailed instructions on how to complete the application accurately.
Remember to stay informed about any changes or updates to the tax credit program, as policies can evolve over time. Additionally, always double-check the dealership's calculations and ask for an itemized bill of sale that shows where the tax credit has been applied.
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Other car brands that qualify
Electric vehicles (EVs) and plug-in hybrids (PHEVs) are eligible for federal tax credits of up to $7,500 under the Inflation Reduction Act. However, this credit depends on various factors, including where the EV is manufactured, the pricing of the vehicle, and the buyer's income. To qualify for the full $7,500 federal EV tax credit, the vehicle must be brand new and assembled in North America.
BMW i4
The BMW i4 is eligible for tax credits, but it is important to note that the vehicle must be assembled in North America to qualify.
Kia EV6
The Kia EV6 is also eligible for tax credits under the same conditions as the BMW i4.
Toyota bZ4X
The Toyota bZ4X qualifies for tax credits as well, again, as long as it is assembled in North America.
Lucid Air
Leasing a high-cost EV like the Lucid Air can qualify for a $7,500 tax credit, but this depends on the dealer passing the savings to the consumer.
Tesla Model S
Similar to the Lucid Air, leasing a Tesla Model S can also qualify for a $7,500 tax credit, provided that the dealer passes the savings to the lessee.
It is worth noting that the availability of tax credits for EVs is subject to change. The Trump administration has targeted the EV tax credit, and proposed changes could impact the eligibility of certain vehicles. Therefore, it is always a good idea to check the latest information and eligibility requirements before making a purchase decision.
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Frequently asked questions
Yes, as of 2024, select Hyundai electric vehicles qualify for federal tax credits. This includes the Hyundai Ioniq 5 and the Hyundai Santa Cruz.
The federal tax credit for electric vehicles is worth up to $7,500.
To qualify for the tax credit, the vehicle must be manufactured in North America, have an MSRP below $80,000 for an SUV and $55,000 for a sedan, wagon, or hatchback, and the buyer must meet certain income requirements.
