As of 2025, the federal tax credit available specifically for plug-in hybrid electric vehicles (PHEVs) is generally up to $3,750. This is lower than the up to $7,500 credit available for fully electric vehicles (EVs) that meet the qualifying criteria.
However, the eligibility for PHEVs is now much more restrictive due to new rules that went into effect January 1, 2025. Among these rules:
- Batteries in PHEVs must not be manufactured or assembled in China, Russia, Iran, or North Korea.
- The batteries must also not contain any components made in those countries to qualify.
As a result, the list of PHEVs eligible for the federal tax credit is very limited. Currently, the Chrysler Pacifica Plug-In Hybrid is reportedly the only PHEV model eligible for the federal tax credit under these new regulations.
In contrast, many fully electric vehicles remain eligible for the full $7,500 credit, provided they meet cost and assembly location requirements. For these EVs, the maximum MSRP to qualify is $80,000, and the buyer can claim up to $7,500 as a federal tax credit.
Summary
| Vehicle Type | Federal Tax Credit Available | Notes |
|---|---|---|
| Fully Electric Vehicles (EVs) | Up to $7,500 | Subject to MSRP and assembly criteria |
| Plug-In Hybrid Electric Vehicles (PHEVs) | Up to $3,750 | Only very few eligible PHEVs (e.g., Chrysler Pacifica); battery origin restrictions apply |
Thus, if you are considering a PHEV purchase with the intention of receiving a federal tax credit in 2025, you should carefully verify eligibility because it is currently very limited. Fully electric vehicles generally have a more straightforward path to the full $7,500 credit.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-current-federal-tax-credits-available-for-phevs/
