Commercial Electric Vehicle (EV) and Fuel Cell Electric Vehicle (FCEV) Tax Credit

Beginning January 1, 2023, a tax credit is available to businesses and tax-exempt organizations for the purchase of new EVs and FCEVs. Vehicles with a gross vehicle weight rating (GVWR) below 14,000 pounds (lbs.) must have a battery capacity of at least seven kilowatt-hours (kWh) and vehicles with a GVWR above 14,000 lbs. must have a battery capacity of at least 15 kWh. The tax credit amount is equal to the lesser of the following amounts:

  • 15% of the vehicle purchase price for plug-in hybrid electric vehicles
  • 30% of the vehicle purchase price for EVs and FCEVs
  • The incremental cost of the vehicle compared to an equivalent internal combustion engine vehicle

Maximum tax credits may not exceed $7,500 for vehicles under 14,000 lbs. and $40,000 for vehicles above 14,000 lbs. Businesses may not combine this tax credit with the Clean Vehicle Tax Credit.

For more information, see the Internal Revenue Service (IRS) Commercial Clean Vehicle Credit website and the IRS Guidance on the Incremental Cost for the Commercial Clean Vehicle Credit.

(Reference Public Law 117-169 and 26 U.S. Code 45W)

Point of Contact
U.S. Internal Revenue Service
Phone: (800) 829-1040
http://www.irs.gov/

Jurisdiction: Federal

Type: Incentives

Agency: U.S. Internal Revenue Service

Enacted: Aug 16, 2022

Technologies: EVs, Hydrogen Fuel Cells, PHEVs

See all Federal Laws and Incentives.