Get ready, folks! There are still some amazing deals to be had on electric vehicles. In 2024, several 2004 and 2005 full-electric vehicles remain eligible for a one-time $7,500 federal tax credit. This credit can be deducted from the year's tax bill or collected upfront during the transaction. It's a great opportunity for those looking to make the switch to electric.

Navigating the Credit Limitations

The credit is limited to electrified trucks, vans, and SUVs priced below $80,000, and passenger cars with MSRPs no higher than $55,000. These vehicles also need to exceed set levels of domestic content and assembly and meet buyers' income limits. However, many import brands have found work-arounds to level the playing field. For example, cash-back rebates as generous as $8,250 on the Kia EV9 are readily available. Additionally, some automakers are incorporating the full tax credit into EV lease deals, taking advantage of a loophole in last year's Inflation Reduction Act.In addition to full-electric vehicles, a few qualifying plug-in hybrid (PHEV) models are also eligible for federal tax credits of $3,750 - $7,500. These credits can be used as an upfront discount for eligible buyers, making PHEVs an attractive option as well.

Pre-Owned EV Tax Credit

EV buyers in the pre-owned market can also benefit from a tax credit. The credit can be as rich as $4,000 or 30 percent of the used model's transaction price, whichever is lower. To qualify, the vehicle must have had only one owner and be purchased from a dealership. Assembly or parts sourcing do not apply here, but buyer income limits do.

The Impact of Tariffs

There are question marks regarding the future of EV tax credits and the cost of battery-powered vehicles. Donald Trump has made it clear that he is not a fan of EVs and has pledged to eliminate the credits. However, with Tesla CEO Elon Musk now a close confidant, that stance could soften.More importantly, Trump has proposed enacting tariffs that could boost the prices of electric vehicles and virtually all cars, trucks, and SUVs sold in the US. An additional 10% tariff on goods from China, where many critical auto components are sourced, and a purported 25% tariff on goods from Mexico and Canada could have a significant impact. Many models, including heavy-duty versions of the Ram pickup and certain versions of the Chevrolet Silverado, are built in Mexico. Likewise, several key models hail from Canada, and some vehicles and/or components cross either border multiple times for assembly.If these tariffs come to fruition, manufacturers are likely to pass on part or all of the added costs to consumers, which could wreak havoc on the new-vehicle market already plagued by affordability issues.

Year-End Deals and Promotions

Right now, shoppers can take advantage of year-end discounts and other EV sales promotions. Ford is currently offering complimentary home charger and installation offers on its F-150 Lightning and Mustang Mach-E models. These deals are especially rich on last year's models that have lingered on dealers' lots. In addition to steep cash rebates, cut-rate financing deals, and discounted leases are the order of the day in this segment.In short, the coming weeks could be the best (and perhaps last) time to buy an electric vehicle at an affordable price. With rising prices a possibility across the board and the future of EV tax credits uncertain, now is the time to act.