Looking at the list, the used car tax credit seems pointless.
With the Inflation Reduction Act now signed into law, automakers are scrambling to figure out which of their models still qualify for the $7,500 tax credit. According to the government's own website, only around 20 or so new electric vehicles and plug-in hybrids will still receive the credit. But what about used ones? For the first time ever, the US government will give a $4,000 credit for pre-owned vehicles. Of course, there are plenty of stipulations.
The credit is worth up to $4,000 or 30% of the car's purchase price (whichever is lower), the cost must be less than $25,000, and the vehicle has to be at least two model years old. It's unclear if the used vehicles will still carry the same North American assembly requirement, but we've created this list assuming that is the case. It's worth noting that the used credits won't kick in until January 1, 2023, but we believe these will be the only eight cars that are eligible.
Note: If you're wondering why there's not a single Tesla vehicle here, that's because we couldn't find one currently for sale under $25,000 due to high demand.
Easily the most expensive car on this list ($75,995 when new), the Cadillac ELR was a commercial flop because it was essentially a rebadged Chevy Volt with fewer doors and more leather. But GM's failure is a buyer's gain, because used ELRs are now easy to find under $25,000. Cadillac only built 2,958 of these cars total, so finding one available might be the trickiest part.
The ELR is a great toe-dip into the EV lifestyle because it pairs a small 16.5 kWh lithium-ion battery with a meager 1.4-liter four-cylinder gas engine. On battery power, the ELR will go around 37 to 39 miles, and the gas engine will extend that to around 340 miles total, perfect for long road trips. With only 217 horsepower and 295 lb-ft of torque (later upped to 233 hp and 373 lb-ft), the ELR is far from fast, but it's easily the most powerful car on this list.
Perhaps the two-door Caddy ELR is too impractical? Good thing the car it's based on, the Chevrolet Volt, is also available starting at around $10,000. The first-generation Volt was a funky-looking hatchback with a strange interior, but it still offers the flexibility of driving 38 miles on electric power or around 380 miles total with a modest 149 hp driving the front wheels.
Chevy introduced a second-generation model in the 2016 model year, changing the bodystyle to a more conventional-looking sedan. GM also increased the range to 420 miles (53 miles on electric only) while keeping output the same. These newer Bolts are available closer to the $20,000 mark, but are well worth the price for the more premium interior and superior range.
The first all-electric car on this list, the Chevrolet Bolt is all the EV most drivers need. It's a small hatchback delivering 238 miles of range from a 60 kWh battery pack. We know everyone thinks they need an EV with a 500-mile range, but the average commute in the US is only 16 miles each way. The Bolt has the longest electric-only range on this list and with 200 hp driving the front wheels, it's as powerful as a Mk6 Volkswagen Golf GTI.
We won't mince words here, the Ford Focus Electric was built purely as a compliance car and it's not really worth considering compared to some of the other EVs on the list. Its 143 hp is not terrible, but the original only came with a tiny 23 kWh battery, enabling only 76 miles of driving range. This was later upped to a 33.5 kWh pack with a 115-mile range for the 2017 model year. You can find one of the early ones starting at around $10,000, but the 2017 model is around double that.
It's certainly not the prettiest car here, but the Ford C-Max Energi is not a terrible option for used car buyers that want to have a small taste of electrification. Like the Bolt, the C-Max still has a 2.0-liter four-cylinder engine that's paired with an electric motor to deliver up to 195 hp. But because the battery is only 7.6 kWh, the electric range is lower at just 20 miles. At least the gas tank is a sizable 14 gallons, meaning the C-Max can go around 570 miles total. Prices start at around $12,000.
If the C-Max sounded intriguing but it's just too ugly for you to consider, the Ford Fusion Energi might be the perfect solution. Based on the Aston Martin-looking second-generation Fusion, the Energi pairs a 2.0-liter four-cylinder engine with an 88 kW electric motor, combining to produce 188 hp. The total range is a whopping 588 miles, 20 of which will be all-electric. That means you can do your work commute on EV power, charge at night, then use the gas engine on longer weekend trips.
Believe it or not, the Nissan Leaf is actually assembled in Smyrna, Tennessee, meaning it should qualify for the used credit. The original Leaf debuted with a minuscule 24 kWh battery, enabling only 73 miles of range. Nissan gradually increased the battery size, bringing the range to 75 miles for 2013, 84 miles for 2014, and up to 107 miles for 2016. These range figures aren't great, but the Leaf is the cheapest car on this list, starting at around $6,500. With prices that low, the tax credit will revert to the 30%, amounting to around $2,000. A used EV for under $5,000? Sounds pretty good to us.
The second-generation model arrived in 2017, sporting less cartoonish styling and a nicer interior. Along with the visual improvements, the Leaf got a larger 40 kWh battery with a far superior 151-mile range. Nissan introduced a 62 kWh pack in 2019 with a 226-mile range, but we couldn't find any for less than $25,000.
The last (but certainly not least) car on this list is the Fiat 500e. It was built in Toluca, Mexico, so it should qualify for the used credit. This is a compliance car, just like the Focus Electric, but it's just so darn cute and charming to drive, so we will give it a pass. With only a 24-kWh battery enabling an 83-mile range, this is certainly not a road trip vehicle, but it would make a great city runabout or local commuter.
Its 111 hp doesn't sound like much on paper, but the 500e's diminutive size enables a 0-60 mph sprint in just 8.2 seconds, just 1.3 seconds slower than the Abarth trim. With prices starting at around $10,000, you can save around $3,000 (30% of the purchase price). For $7,000, we'd happily have the 500e as a second vehicle for boring commutes with a nice ICE sports car in the garage waiting for the weekend.