As part of America’s Recovery and Reinvestment Act that went into effect in 2005, the federal government has been issuing tax credits for the purchase of all-electric vehicles. Actually, they’ve been issuing tax credits for the purchase of any alternative fuel vehicles, but the credits for the all-electrics seem to be the highest, climbing all the way up to $7,500. Not only are the credits on the all-electrics higher, but it looks like they are going to last longer than credits on all other alternative-fuel vehicles. Most of those credits will not be available on vehicles purchased after December 31, 2010. However, the government is using a different standard to base the expiration of the all-electric tax credit.

According to the IRS, the credit will begin to phase out at the beginning of the second calendar quarter after a manufacturer produces 200,000 eligible plug-in electric vehicles, counting from January 1, 2010. The IRS will announce when a manufacturer exceeds that production and when the subsequent phase-out will begin. As of now, a list of eligible plug-in vehicles is available at: Be sure to keep checking this site and the IRS website at to see what models are still available for credit.  Here’s the current IRS list of qualified electric cars:

Coda Automotive Inc

Model Year Vehicle Description Credit Amount
2010 CODA Sedan (Electric Vehicle Manufactured by CODA Automotive Inc.) $7500


Model Year Vehicle Description Credit Amount
2011 Chevrolet Volt $7,500

Nissan North America

Model Year Vehicle Description Credit Amount
2011 Nissan Leaf $7,500

Tesla Motors Inc.

Model Year Vehicle Description Credit Amount
2008/2009/2010 Tesla Roadster $7500

Wheego Electric Cars Inc

Model Year Vehicle Description Credit Amount
2011 Wheego LiFe Electric Vehicle $7,500

Of course, the credit is based on certain stipulations. Obviously the biggest stipulation is that it must be a full plug-in electric vehicle. This is defined as a vehicle which is propelled to a significant extent by an electric motor which draws power from a battery that has a capacity of not less than 4 kilowatt hours and is capable of being recharged from an external electrical source. Basically, if you can put any type of fuel into it, other than electricity, it doesn’t qualify.

Second, it has to be made by a manufacturer. That means your crazy uncle Louie’s “Car of Tomorrow” invention built out back in the garage with nothing more than an old windmill and all the old used radios he could find, doesn’t qualify. It also doesn’t include conventional vehicles that have been converted to all-electric drive. They have to have rolled off the manufacturer’s line as all-electrics to begin with.  Here’s a current list of qualified manufacturers:

Qualified Plug-in Electric Drive Motor Vehicles (IRC 30D)
CODA Automotive
General Motors Corporation
Nissan North America
Wheego Electric Cars, Inc.

As with every other alternative-fuel vehicle tax credit, it has to be new. No second-hand cars, no lease turn-ins. You do have the option of taking the credit if you’re only going to be leasing the vehicle yourself, but you need to discuss this option with your dealership first. Since they will be the ones to retain actual ownership of the vehicle, the tax credit will go to them. Most of the time, they’ll be kind enough to pass that savings on to you, but you’ll want to be very clear on this one before putting pen to paper.

Finally, the vehicle must be used mostly within the United States and placed in service after January 1, 2010. These are pretty much no-brainers since just about everyone taking the credit will be U.S. citizens and not many of us make a habit of shipping cars overseas as gifts, and we’re already past the January 1 deadline of in-service. However, don’t forget to fill out Form 8936 with your taxes to claim the credit. If you have someone else do your taxes for you, it won’t hurt to mention the credit and the form beforehand. Better safe than sorry.

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