Considering a New or Used Electric or Hybrid Vehicle in 2025?
Significant changes from the OBBBA, effective July 4, 2025, may impact your electric or hybrid vehicle purchase or lease decision. Here’s what you need to know:
Federal Incentives – Available Through September 30, 2025
1. New Clean Vehicle Credit (§ 30D)
Maximum Credit: Up to $7,500
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$3,750 for meeting critical mineral requirements
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$3,750 for meeting battery component requirements
Eligibility Requirements:
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Vehicle must be assembled in North America
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Minimum battery capacity of 7 kWh
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Must meet technical and reporting requirements
Income Limits:
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$300,000 (joint)
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$225,000 (head of household)
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$150,000 (single)
MSRP Limits:
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$80,000 for SUVs, vans, pickups
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$55,000 for other vehicles
Point-of-Sale Option:
Credit can be transferred to the dealer to reduce your purchase price immediately.
Termination:
Credit is repealed for vehicles acquired after September 30, 2025.
Recommended Action:
Purchase or lease and place the vehicle in service by September 30, 2025, to claim the credit.
2. Previously-Owned Clean Vehicle Credit (§ 25E)
Maximum Credit: Up to $4,000 (or 30% of the sale price, whichever is less)
Eligibility Requirements:
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Vehicle must be at least two model years old
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Purchased from a dealer for $25,000 or less
Income Limits:
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$150,000 (joint)
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$112,500 (head of household)
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$75,000 (single)
Additional Conditions:
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Buyer must not have claimed a used clean vehicle credit in the past three years
Termination:
Credit ends for vehicles acquired after September 30, 2025.
Recommended Action:
Complete your purchase and place the vehicle in service by the deadline.
3. Commercial Clean Vehicle Credit (§ 45W)
Available Through: 2032
Who Qualifies: Businesses and tax-exempt organizations
Credit Amount:
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Lesser of 15% of the vehicle’s basis (30% if not powered by gasoline or diesel), or the incremental cost
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Up to $7,500 for vehicles under 14,000 lbs
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Up to $40,000 for heavier vehicles
Status:
This credit remains available beyond September 30, 2025. It is not affected by the OBBBA.
Safe Harbor Provision:
Incremental cost values are published annually by the Department of Energy and accepted by the IRS.
Oregon State Incentives
1. Oregon Clean Vehicle Rebate Program (OREV & Charge Ahead)
Standard Rebate: Up to $2,500 for new EVs or plug-in hybrids (base MSRP under $50,000)
Charge Ahead Rebate: Up to $5,000 for low- and moderate-income households (for new or used EVs)
Stacking:
Eligible buyers may combine both rebates for up to $7,500 in total state incentives.
Status:
Subject to funding availability. Program may be suspended if funds are depleted.
Where to Check:
Visit the Oregon DEQ website for current status and application instructions.
Key Questions to Ask the Dealer
Federal Credit Eligibility
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Is the vehicle eligible for the federal new or used clean vehicle credit?
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Will the purchase or lease be completed and the vehicle placed in service by September 30, 2025?
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Can the credit be transferred to the dealer at the point of sale?
Oregon Rebate Eligibility
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Does the vehicle qualify for the Oregon Clean Vehicle Rebate or Charge Ahead Rebate?
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Is the dealer participating in Oregon’s rebate program?
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Can the rebate be applied at the point of sale?
Vehicle-Specific Details
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What is the battery capacity (in kWh)?
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Where was the vehicle assembled?
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What is the vehicle’s MSRP?
Documentation and Reporting
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Will the dealer provide all required documentation for federal and state incentives?
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Will the dealer submit required reports to the IRS and Oregon DEQ?
Documentation to Request and Retain
From the Dealer:
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Purchase or lease agreement (include date, price, and VIN)
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Manufacturer’s certification (battery capacity, assembly location, mineral and battery compliance)
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Dealer’s IRS report (for § 30D credit)
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Documentation of any point-of-sale credit transfer or rebate
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For Oregon rebates: copy of completed rebate application and confirmation of submission
For Tax Filing:
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IRS Form 8936 (include VIN and all required details)
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Proof of income eligibility (for both federal and state programs)
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Any official correspondence from the IRS or Oregon DEQ regarding your credit or rebate
Planning Considerations and Next Steps
Timing is Critical:
Federal credits for new and used clean vehicles will expire for individual buyers on September 30, 2025. Take action early.
State Incentives:
Oregon rebates depend on available funds. Apply as soon as possible after purchase.
Post-2025 Outlook:
After September 30, 2025, only the Commercial Clean Vehicle Credit (§ 45W) will remain available for businesses and nonprofits.
Legislative Uncertainty:
The OBBBA may be subject to further changes. Stay informed about updates that could affect credit eligibility.
Questions?
We recommend:
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Consulting a qualified tax advisor for personalized advice
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Checking the IRS and Oregon DEQ websites for the latest rules and application procedures
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