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IRC §30D — Clean Vehicle Credit (CVC): what’s changed and what still applies (as of 2025)

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Current Status 

The IRS now states the New Clean Vehicle Credit (§30D), Previously‑Owned Clean Vehicle Credit (§25E), and Qualified Commercial Clean Vehicle Credit (§45W) are not available for vehicles acquired after September 30, 2025, unless you entered a binding written contract and made a payment by that date. “Placed in service” still means when you take possession. See also Internal Revenue Service, Clean Vehicle Tax Credits.

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The IRC § 30D credit was enacted by the Energy Improvement and Extension Act of 2008 and has been amended repeatedly, most significantly by the Inflation Reduction Act ("IRA", Pub. L. 117‑169). The IRA renamed the credit “Clean Vehicle Credit,” added a final assembly in North America requirement effective Aug. 17, 2022, and—effective Jan. 1, 2023—imposed MSRP/MAGI limits, battery capacity ≥7 kWh, and battery sourcing rules (critical‑minerals and battery‑components). See Clean Vehicle Credits Under Sections 25E and 30D; Transfer of Credits; Critical Minerals and Battery Components; Foreign Entities of Concern, 89 Fed. Reg. 37,706 (May 6, 2024); 

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Post‑IRA Framework Summary

• Credit amount (2023+): up to $7,500 = $3,750 (critical minerals) + $3,750 (battery components) — both tests must be met.

• Key requirements:

  • Final assembly in North America; battery ≥7 kWh; GVWR <14,000 lbs;

  • qualified manufacturer;

  • seller time‑of‑sale report to IRS + buyer;

  • Manufacturer's Suggested Retail Price (MSRP) caps ($80k SUVs/vans/pickups; $55k other vehicles);

  • Modified Adjusted Gross Income (MAGI) caps ($300k MFJ/$225k HoH/$150k Single).

• Foreign Entity of Concern (FEOC) exclusions: No FEOC battery components for vehicles placed in service after 12/31/2023; no FEOC critical minerals after 12/31/2024 (cross‑referencing DOE’s FEOC guidance).

• Point‑of‑sale transfer (from 1/1/2024): eligible buyers may transfer the §30D/§25E credit to a registered dealer for instant price reduction or cash; recapture applies if eligibility fails.

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2022 or Earlier Purchases (pre‑IRA rules)

If you bought a new, qualified plug‑in electric vehicle (EV) in 2022 or earlier, you may be eligible for a nonrefundable credit up to $7,500 under the prior § 30D formula. 26 U.S.C. § 30D (2018 & Supp.); Internal Revenue Service, Plug‑In Electric Drive Motor Vehicle Credit.

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• Pre‑IRA Credit Formula: $2,500 + $417 per kWh of capacity over 5 kWh (capped at $7,500), subject to the former 200,000‑unit per‑manufacturer phase‑out. See § 30D(b)(2) (2018); Internal Revenue Service, id.

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For vehicles purchased and delivered Aug. 17–Dec. 31, 2022, the final‑assembly‑in‑North‑America rule applied, with limited binding‑contract transition relief for contracts executed before Aug. 16, 2022, even if delivered later in 2022. See 9 Fed. Reg. at 37,714–17; Internal Revenue Service, Clean Vehicle Tax Credits. To claim the 2022 credit, file Form 8936 with the VIN.

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Vehicles Placed in Service in 2023 or Later (through the Sept. 30, 2025 acquisition cutoff)

The CVC is up to $7,500 split into $3,750 for meeting the critical‑minerals requirement and $3,750 for meeting the battery‑components requirement, in addition to final assembly, MSRP/MAGI, and reporting conditions. § 30D(b)–(d).

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• Two‑Part Test: Critical minerals percentage and battery components percentage must both be met. Current schedules (see 89 Fed. Reg. at 37,709–12):

  • Critical Minerals Minimum % (value): 40% (2023); 50% (2024); 60% (2025); 70% (2026); 80% (2027+).

  • Battery Components Minimum % (value): 50% (after 4/17/2023–12/31/2023); 60% (2024–2025); 70% (2026); 80% (2027); 90% (2028); 100% (2029+). 

• Foreign Entity of Concern (FEOC) Exclusions: Bars eligibility if battery components are manufactured/assembled by a FEOC for vehicles placed in service after 2023, or if applicable critical minerals are extracted/processed/recycled by a FEOC for vehicles placed in service after 2024. See U.S. Dep’t of Energy, 30D New Clean Vehicle Credit (FEOC interpretive guidance); 89 Fed. Reg. at 37,711–12​

• Seller/Manufacturer Reporting: Qualified manufacturers must submit periodic VIN and compliance data under Rev. Proc. 2023‑38, as modified by Rev. Proc. 2024‑26, 2024‑26 I.R.B., including DOE upfront reviews; sellers must provide time‑of‑sale reports to buyers and IRS. See also 89 Fed. Reg. at 37,730–37

• § 30D or § 25E Credit -- Point‑of‑Sale Transfers (2024+): mechanics and dealer registration rules (with recapture if eligibility fails) are in the final regs and Internal Revenue Service, Topic H—Transfer of New/Previously Owned Clean Vehicle Credits (FS‑2024‑26). See also 89 Fed. Reg. at 37,712–20.

 

Previously‑Owned Clean Vehicle Credit (§25E)

For qualifying used EVs/FCVs acquired on or before Sept. 30, 2025 from a licensed dealer for $25,000 or less, the credit equals 30% of sale price up to $4,000, subject to MAGI limits. Moreover, you can claim the credit no more than once every three years, and the sale must be reported by the seller to the IRS; point‑of‑sale transfer allowed starting 2024. See § 25E(a)–(c), (e).

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Qualified Commercial Clean Vehicle Credit (§45W)

For businesses and tax‑exempt organizations, the credit (for vehicles acquired on or before Sept. 30, 2025) equals the lesser of (see § 45W(a)–(c)):

• (i) 15% of basis (30% if no gas/diesel engine) or

• (ii) incremental cost; capped at $7,500 (<14,000 lbs) or $40,000 (≥14,000 lbs).

 

Tax‑exempt entities may elect direct pay under §6417. Treasury/IRS issued proposed regs on Jan. 14, 2025 further detailing incremental‑cost methods, leasing/tax‑exempt issues, and other mechanics; IRS page reflects the Sept. 30, 2025 acquisition cutoff. See Section 45W Credit for Qualified Commercial Clean Vehicles, 90 Fed. Reg. 3,506 (Jan. 14, 2025).

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Note on Two‑Wheeled Plug-In Electric Vehicle (PEVs)

The separate two‑wheeled PEV credit under prior § 30D(g) expired before 2023 and does not apply under the current CVC framework. See Internal Revenue Service, Electric Vehicle and Plug‑in Hybrid Vehicle Credit (IRC 30 and IRC 30D).