New law slashes clean vehicle tax credits—here’s what you need to know (and do) before September 30^th.

If you’ve been thinking about buying an electric vehicle (EV), time is officially running out to take advantage of valuable tax credits. Thanks to the recently passed One Big Beautiful Bill Act (OBBBA), several major clean energy tax incentives are being cut short, including EV purchase credits that were originally expected to last through 2032.

Whether you’re eyeing a brand-new Tesla or considering a used hybrid to save on fuel costs, there are real tax savings on the table—but only if you act fast. Here’s what’s changing, who qualifies, and how to lock in the benefit before the deadline.

What’s Changing Under the New Law?

Signed into law on July 4, 2025, the OBBBA repeals or shortens many clean energy credits originally created under the Inflation Reduction Act (IRA). For EV buyers, this means the following credits are now set to expire on September 30, 2025:

• Clean Vehicle Credit (new EVs)
• Used Clean Vehicle Credit
• Commercial Clean Vehicle Credit

Another related credit—the Alternative Fuel Refueling Property Credit for home EV chargers—will now expire June 30, 2026.

Additionally, the new law introduces an unexpected bonus: a deduction for EV loan interest on qualifying purchases.

Clean Vehicle Credit (Up to $7,500)

This is the main federal tax credit for buying a new electric or fuel cell vehicle.

To Qualify:

• Purchased and placed in service by September 30, 2025
• Final assembly must occur in North America
• Vehicle price cap:
  • $55,000 for cars
  • $80,000 for vans, SUVs, and pickups
• Buyer income limits:
  • $300,000 for joint filers
  • $225,000 for heads of household
  • $150,000 for single filers

Credit Breakdown:

• $3,750 if the car meets critical mineral requirements
• $3,750 if the car meets battery component requirements
• $7,500 total if both are met

Look up eligible vehicles:
fueleconomy.gov/feg/tax2023.shtml
afdc.energy.gov/laws/electric-vehicles-for-tax-credit

Used Clean Vehicle Credit (Up to $4,000)

Buying pre-owned? There’s a credit for that, too—but with tighter limits.

To Qualify:

• Placed in service by September 30, 2025
• Sold by a dealer for $25,000 or less
• At least 2 model years older than current year
• Sale must be first transfer since August 16, 2022
• Buyer can’t have claimed a used EV credit in the last 3 years
• Buyer income limits:
  • $150,000 for joint filers
  • $112,500 for heads of household
  • $75,000 for single filers

More info: fueleconomy.gov/feg/taxused.shtml

Commercial Clean Vehicle Credit (Up to $40,000)

Designed for businesses, this credit applies to qualifying electric or hybrid commercial vehicles.

• Up to $7,500 for vehicles under 14,000 pounds
• Up to $40,000 for heavier vehicles like trucks or vans
• Credit is based on a % of cost or the difference between EV and gas equivalent

Deadline: Placed in service by 9/30/2025

Alternative Fuel Refueling Property Credit

This covers 30% of the cost (up to $1,000) for individuals who install EV charging stations at home.

To qualify:

• Must be located in an eligible census tract
• Can claim through June 30, 2026

Check location eligibility:
DOE Mapping Tool

Bonus Tax Benefit: EV Loan Interest Deduction

For the first time ever, interest paid on loans to purchase a qualifying vehicle may be deductible, up to $10,000/yearfrom 2025–2028.

Requirements:

• Vehicle must meet “applicable passenger vehicle” definition
• Loan must be used to buy and secured by the vehicle
• Original use must begin with you
• Deduction applies whether or not you itemize

Income Phaseouts:

• Deduction phases out between:
  • $100,000–$150,000 for single filers
  • $200,000–$250,000 for joint filers

Key Deadlines You Can’t Miss

9/30/25            Clean Vehicle Credit (new)
9/30/25            Used Clean Vehicle Credit
9/30/25            Commercial Clean Vehicle Credit
6/30/26            Alternative Fuel Refueling Property Credit
Now-2028       EV Loan Interest Deduction

What You Should Do Now

1. Shop for a qualifying EV before September 30.
2. Check eligibility online for the specific vehicle and your income level.
3. Work with your lender to ensure loan documentation supports the new interest deduction.
4. Talk to a tax professional to make sure you can claim all eligible credits—and time your purchase for maximum impact.
5. Install a home EV charger before June 2026 if you want to claim the property credit.

Ready to Claim Your EV Credit?

These benefits may not be around much longer. If you're considering an electric vehicle, don't wait—make your move while the tax incentives still exist. Your tax advisor can provide personalized guidance. If you have questions, leave a comment below, or feel free to contact me directly. I’m happy to help!