Understanding 2025 EV Tax Credit Changes

The landscape for electric vehicle (EV) incentives is changing quickly, and recent federal legislation known as the One Big Beautiful Bill Act (OBBBA) has significantly impacted how and when drivers can take advantage of EV tax credits. If you're considering a new or used EV in 2025, it's important to understand the new rules, deadlines, and eligibility requirements before making your purchase. At Honda Stratham, we're here to break down the changes so you can make an informed decision.

Key Deadline for Federal EV Tax Credits

Under the OBBBA, the most important date to remember is September 30, 2025. After this date, federal EV tax credits for both new and used vehicles will expire. That means buyers have a limited window to lock in up to $7,500 in savings on a qualifying new EV or up to $4,000 on a qualifying used EV.

There is one important exception: if you sign a binding purchase contract and make a payment on or before September 30, 2025, you may still qualify for the credit-even if you take delivery of your vehicle after the deadline.

New EV Tax Credit Details

If you're looking at a new EV or fuel-cell vehicle, here's what you need to know:

Credit amount: Up to $7,500 for eligible models.

Deadline: Must be purchased by September 30, 2025.

Battery sourcing rules: Vehicles must meet stricter battery component and critical mineral sourcing standards.

Foreign entity of concern exclusion: EVs with batteries sourced from countries like China, Russia, or Iran will not qualify.

Income limits: To qualify, your modified adjusted gross income (MAGI) must not exceed:

$300,000 for married couples filing jointly
$225,000 for heads of household
$150,000 for all other filers

Used EV Tax Credit Details

Buying a pre-owned EV can also qualify you for savings, but with some unique requirements:

Credit amount: Up to $4,000 or 30% of the sale price, whichever is less.

Price cap: Vehicle must cost $25,000 or less.

Vehicle age: Model year must be at least two years older than the year of purchase.

Income limits: MAGI must not exceed:

$150,000 for married couples filing jointly
$112,500 for heads of household
$75,000 for all other filers

Point-of-Sale Benefit

A major convenience for EV shoppers is that credits can still be applied at the point of sale. That means you don't have to wait until tax season to see the savings-you can transfer the credit directly to Honda Stratham and enjoy an immediate discount off your purchase price.

Leasing Considerations

Leased EVs have historically offered more flexibility, since they were classified as commercial purchases and exempted from strict sourcing and income rules. However, under the OBBBA, the commercial clean vehicle credit will also expire on September 30, 2025. This means leasing incentives may no longer be available after that date, so customers considering a lease should act within the current timeline.

Where to Learn More

The EV tax credit rules can be complex, and eligibility often depends on the specific make, model, and trim of the vehicle you're interested in. Helpful resources include:

Fueleconomy.gov - Search eligible EVs and check updated model-specific qualifications.
IRS.gov - Access FAQs and official tax guidance related to the OBBBA changes.
Honda Stratham - As a registered dealer, we provide you with a required "time of sale report" and confirm your eligibility before you buy.

Take Advantage Before Time Runs Out

If you've been thinking about making the switch to electric, now is the time. The upcoming expiration of federal EV tax credits creates a unique opportunity for drivers to save thousands on new or used EVs, but only if you act before September 30, 2025.

At Honda Stratham, our team is ready to help you explore EV options, confirm your eligibility for credits, and secure the best possible deal. Visit us today to learn more about your choices and drive into the future of mobility with confidence.

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Understanding 2025 EV Tax Credit Changes