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Federal Tax Incentives: 
Alternative Motor Vehicle Credit (IRC § 30B(b))

Overview & Current Status (as of 2025)

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The Alternative Motor Vehicle Credit in § 30B includes the new qualified fuel cell motor vehicle credit under § 30B(b) for qualifying vehicles used primarily in the United States.

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Expiration: The credit expired for vehicles purchased after 2021, but a vehicle purchased in 2021 and placed in service in 2022 could still be claimed on the 2022 return. See Instructions for Form 8910 (Rev. Jan. 2022), Internal Revenue Service.

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Eligibility

A new qualified fuel cell motor vehicle is one that (§ 30B(b)(3)):

  • (i) is propelled by power from one or more cells converting chemical energy to electricity using oxygen and hydrogen stored onboard;

  • (ii) for passenger automobiles and light trucks, is certified to Bin 5 Tier II (Clean Air Act § 202(i));

  • (iii) begins original use with the taxpayer; (iv) is acquired for use or lease (not for resale); and

  • (v) is made by a manufacturer.

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Pursuant to § 30B(h)(1) a “motor vehicle” is manufactured primarily for use on public roads and has four or more wheels. § 30B(h)(10) also states vehicles must also comply with the Clean Air Act (or approved state analogs) and federal motor vehicle safety standards under 49 U.S.C. §§ 30101–30169.

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How the credit amount is determined

The amount of the new qualified fuel cell motor vehicle credit varies dependent on the applicable vehicle's gross vehicle weight rating (GVWR) and fuel efficiency in comparison to the "2002 model year city fuel economy" benchmark as defined in §30B(b)(2). The 2002 model year city fuel economy with respect to a vehicle shall be determined on a gasoline gallon equivalent basis as determined by the Administrator of the Environmental Protection Agency using the tables provided in IRC § 30B(b) with respect to such vehicles.

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​Base credit by GVWR (§ 30B(b)(1)(A)–(D)):

  • $8,000 for GVWR ≤ 8,500 lbs ($4,000 if placed in service after 12/31/2009),

  • $10,000 for > 8,500–14,000 lbs,

  • $20,000 for > 14,000–26,000 lbs, and

  • $40,000 for > 26,000 lbs.

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Fuel‑efficiency increase (passenger auto/light truck only) (§ 30B(b)(2)(A)):

  • add $1,000 if such vehicle achieves at least (≥ 150% < 175%) of the 2002 model year city fuel economy,

  • $1,500 if such vehicle achieves at least (≥ 175% < 200%) of the 2002 model year city fuel economy,

  • $2,000 if such vehicle achieves at least (≥ 200% < 225%) of the 2002 model year city fuel economy,

  • $2,500 if such vehicle achieves at least (≥ 225% < 250%) of the 2002 model year city fuel economy,

  • $3,000 if such vehicle achieves at least (≥ 250% < 275%) of the 2002 model year city fuel economy,

  • $3,500 if such vehicle achieves at least (≥ 275% < 300%) of the 2002 model year city fuel economy,

  • $4,000 if such vehicle achieves at least (≥ 300%) relative to 2002 model year city fuel economy.

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2002 Model Year City Fuel Economy (§30B(b)(2)):

2002 city fuel economy is measured consistent with 40 C.F.R. part 600 procedures, and the statute provides weight‑class tables (e.g., 1,500/1,750 lbs—45.2 mpg … 7,000–8,500 lbs—11.3 mpg) for passenger automobiles and light trucks. See § 30B(h)(2), (b)(2)(B)(i)–(ii).

 

In the case of a passenger automobile (I.R.C. § 30B(b)(2)(B)(i)), the 2002 model year city fuel economy with respect to a vehicle shall be determined in accordance with the following tables (IRC § 30B(b)(2)(B)(i))

  • For purposes of the increased credit for fuel efficiency, the following vehicle inertia weight classes and referenced the 2002 model year city fuel economy applies to passenger automobile(s) (IRC § 30B(b)(2)(B)(i)):

    • 1,500 or 1,750 lbs --- 45.2 mpg 

    • 2,000 lbs --- 39.6 mpg  

    • 2,250 lbs --- 35.2 mpg 

    • 2,500 lbs --- 31.7 mpg

    •  2,750 lbs --- 28.8 mpg 

    • 3,000 lbs --- 26.4 mpg 

    • 3,500 lbs --- 22.6 mpg 

    • 4,000 lbs --- 19.8 mpg  

    • 4,500 lbs --- 17.6 mpg  

    • 5,000 lbs --- 15.9 mpg  

    • 5,500 lbs --- 14.4 mpg  

    • 6,000 lbs --- 13.2 mpg  

    • 6,500 lbs --- 12.2 mpg  

    • 7,000 to 8,500 lbs --- 11.3 mpg​

  • For purposes of the increased credit for fuel efficiency, the following vehicle inertia weight classes and referenced the 2002 model year city fuel economy applies to light truck(s) (IRC § 30B(b)(2)(B)(ii)):

    • 1,500 or 1,750 lbs --- 45.2 mpg  

    • 2,000 lbs --- 39.6 mpg  

    • 2,250 lbs --- 35.2 mpg  

    • 2,500 lbs --- 31.7 mpg  

    • 2,750 lbs --- 28.8 mpg  

    • 3,000 lbs --- 26.4 mpg  

    • 3,500 lbs --- 22.6 mpg  

    • 4,000 lbs --- 19.8 mpg  

    • 4,500 lbs --- 17.6 mpg  

    • 5,000 lbs --- 15.9 mpg  

    • 5,500 lbs --- 14.4 mpg  

    • 6,000 lbs --- 13.2 mpg  

    • 6,500 lbs --- 12.2 mpg  

    • 7,000 to 8,500 lbs --- 11.3 mpg.

  • IRC § 30B(b)(2)(C) states the term “vehicle inertia weight class” has the same meaning as when defined in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).

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Other statutory rules

  • Basis reduction (§ 30B(h)(4)): reduce the vehicle’s tax basis by the amount of the allowed credit.

  • Tax‑exempt use rule (§ 30B(h)(6)): for certain § 50(b)(3)/(4) users (not subject to lease), the seller can be treated as the taxpayer if the seller clearly discloses the credit amount to the user; such property is treated as depreciable for § 30B(g) ordering.

  • Non‑qualifying property (§ 30B(h)(7)): no credit for § 50(b)(1) property or for cost expensed under § 179.

  • Recapture (§ 30B(h)(8)): credit is recaptured if the vehicle ceases to be eligible (including short‑lease recapture), except where converted to a qualified plug‑in electric drive vehicle.

  • Election out (§ 30B(h)(9)): a taxpayer may elect not to claim the § 30B credit.

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