People inspect a Tesla Model Y car.
The Tesla Model Y.
  • You can still get the full $7,500 federal tax credit on some popular EVs.
  • New restrictions on materials from China have shrunk the list of EVs eligible for the full credit.
  • Many automakers are racing to move battery production to the US.

New requirements for a $7,500 federal tax credit on electric vehicles kicked in on January 1, and the list of eligible vehicles just got a lot shorter.

Under the new rules, it's harder to get the full $7,500 credit if a car contains materials from China and other countries that the Treasury Department has labeled a "foreign entity of concern."