Hyundai Tucson Plug-in Hybrid Tax Credit Eligibility

The Hyundai Tucson plug-in hybrid is no longer eligible for federal tax credits for the time being, but that could change later on if it meets new requirements.
Written by Melanie Krieps Mergen
Reviewed by Kathleen Flear
Jan 18, 2023
While previously eligible for an EV tax credit of up to $6,587 for sales before August 17, 2022, the Hyundai Tucson plug-in hybrid is no longer eligible since its final assembly doesn’t take place in North America. It’s possible the Tucson could qualify again in the future, but it will have to meet new requirements.
Since 2010, fully electric and plug-in hybrid vehicle purchases have been eligible for tax credits up to $7,500. The Hyundai Tucson PHEV was eligible for this tax credit until the 2022 Inflation Reduction Act updated eligibility requirements. Since the Tucson PHEV’s final assembly doesn’t take place in North America, it was rendered ineligible. But that could change again in the future if Hyundai makes the necessary changes.
So, is it still worth it to buy one? What vehicles are still eligible? Find out these answers and more below.
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Is the Hyundai Tucson plug-in hybrid still eligible for federal tax credit?

Maybe—it depends on when you purchased your Hyundai Tucson because different qualifying factors will apply based on the date of sale.
Let’s break these down by each time frame.

Before August 17, 2022

In 2010, the US government introduced a tax credit for up to $7,500 for EVs, plug-in hybrids, and fuel-cell electric cars. If you purchased one of these vehicles on or before August 16, 2022, it could be eligible for the tax credit as long as the manufacturer hasn’t surpassed a sales cap.
The applicable credit for a 2022 or 2023 Hyundai Tucson plug-in hybrid is listed at $6,587, and it still hasn’t reached its sales cap. If you bought your Hyundai Tucson plug-in hybrid on or before August 16, 2022, you could be eligible for the tax credit.

After August 16, 2022 and before January 1, 2023

When the Inflation Reduction Act was signed into law in August 2022, it introduced new requirements for hybrid and electric vehicles to be eligible for tax credits. Before more qualifying factors come into effect in 2023, this time frame acts as a sort of transitionary period.
If your plug-in hybrid purchase took place after August 16, 2022 and you had the vehicle in your possession before the new year, you can only claim the applicable tax credit if the vehicle’s final assembly took place in North America.
Unfortunately, the Hyundai Tucson plug-in hybrid—and all Hyundais, for that matter—doesn’t currently meet this requirement, making it ineligible for the tax credit during this period.
As for the qualifying vehicles assembled in North America, the
Treasury Department
announced these rules will still apply until at least March as they still work out the details of some of the new assembly rules.
You can find the list of vehicles that do meet these criteria on the
Alternative Fuels Data Center website
. You can look up specific assembly locations for vehicles by VIN here, too.

If you purchase a Hyundai Tucson plug-in hybrid in 2023

As for whether Hyundai vehicles will be eligible for the Clean Vehicle Credit going forward, the jury’s still out on this one. The
IRS website
has information on the tax credit’s various eligibility criteria, as well as a list of vehicles that are likely (but not yet guaranteed) to qualify.
As of January 2023, the IRS reported Hyundai entered a written agreement to achieve “qualified manufacturer” status, but there’s not yet an official list of which of its models would apply.

What you should know about the new federal EV tax credit requirements

Being assembled in North America is just one of many new requirements for low-emissions vehicles to get a tax credit in 2023 and beyond (at least until 2032, which is the new credit’s expiration date). So what are the other criteria?
First, your income will be a factor. To qualify for the tax credit, you can’t make more than $150,000 per year for single drivers, while married couples who file taxes jointly can’t make more than $300,000.
The type of vehicle and its list price will have an impact, too. Sedans must have a list price under $55,000, while larger vehicles like trucks, vans, and SUVs need to be capped at $80,000. Each of the 2023 Hyundai Tucson’s PHEV
trim level
options are comfortably below this at under $50,000, so list price won’t be much of an issue.
Used vehicles will be eligible, too. The available tax credit here is up to $4,000. To qualify, a used EV or plug-in hybrid must have a list price of $25,000 or less. Income requirements are limited to $75,000 for single filers and $150,000 for joint filers.
At least for now, one of the most challenging qualifying hurdles will be the new requirements for a vehicle’s battery construction. Battery materials need to be sourced from North America or a designated U.S. free-trade partner, and they have to be assembled in North America. These are the sorts of details that are still being determined by the Treasury Department.

Other electric vehicle incentives

Whether the Hyundai Tucson plug-in hybrid is eligible for federal tax credits, you still might find incentives for purchasing it elsewhere. The Inflation Reduction Act also brings back a tax credit for certain costs associated with installing EV charging equipment.
Some states offer their own tax credits, rebates, or other incentives that could extend to the Tucson or home EV charging equipment. The same goes for certain local utility providers. 

Is the Hyundai Tucson plug-in hybrid still worth buying? 

So, is it still worth it to buy a Hyundai Tucson plug-in hybrid? Maybe, maybe not.
If your sole purpose for buying a Hyundai Tucson plug-in hybrid is to score a tax credit, you’ll either need to rent a time machine or hold off and wait to see whether it makes the list of qualifying vehicles going forward.
But if you’re outside the income requirements, this won’t make much of a difference, anyway.
With or without the tax credit, the Tucson still makes a pretty great hybrid.
The 2022 and 2023 Hyundai Tucson PHEVs come equipped with a 13.8 kWh battery pack that gets an EPA-estimated range of up to 33 miles on its own. Overall, it gets an overall fuel economy rating of 80 MPGe combined.
Both the 2022 and 2023 plug-in hybrid models received a 9/10 rating from Car and Driver and their exclusive Editor’s Choice award, and the 2023 model tops the U.S. News rankings of best hybrid SUVs.
The plug-in hybrid is also the Tucson that will give you the most power—it’s capable of generating up to 261 horsepower.
Prioritizing fuel efficiency with the Tucson PHEV doesn’t mean having to forego comfort, either. Heated front seats, Apple CarPlay and Android Auto, and USB charging ports in each row are all standard, and even more features are available on the Limited trim.
All in all, the Tucson offers a satisfying amount of power and features at an accessible price range and doesn’t require much sacrifice in either area. The 2023 SEL PHEV starts at $35,400 and the Limited PHEV starts at $43,200.

What to buy instead of a Hyundai Tucson plug-in hybrid

Not quite committed to the Hyundai Tucson? There are more electric and plug-in hybrid choices now than ever, so you’ve got plenty of other options to explore. 

If you really want the federal tax credit: 2023 Ford Escape PHEV

Starting price: $38,500
As 2022 came to a close, the Ford Escape PHEV was still eligible for a federal tax credit, and it’s named as a PHEV that could likely continue to be eligible going forward. It gets an estimated 41 mpg combined, which could still make a serious dent in your fuel costs.
It falls in a similar price range and has a decent list of standard features, but unlike the Tucson, it’s only available with front-wheel drive.

If you want a luxury PHEV: 2023 Audi Q5

Starting price: $44,200
The Audi Q5 is another plug-in hybrid that had yet to meet its tax credit sales cap at the end of 2022. Its electric-only range is 23 miles. While the Tucson is more efficient, the Q5 has more power potential and a range of luxurious features. 
The 2023 PHEV is capable of generating up to 362 horsepower and 369 pound-feet of torque, and it’s also a Top Safety Pick+ of the Insurance Institute of Highway Safety.

If you’re ready to go all-electric: 2023 Hyundai Ioniq 5 

Starting price: $42,785
Maximum range: 303 miles
If you’re ready to take on a fully electric SUV, the Hyundai Ioniq 5 is one of the best options out there. The 2023 model gets a perfect 10/10 rating from Car and Driver, and the 2022 model earned an Editor’s Choice pick and their EV of the Year Award.
Like the Tucson and other Hyundais, it’s still to be determined whether it will qualify for the Clean Vehicle Tax Credit. But even without it, it still comes at a relatively accessible price for all it offers without skimping on desirable comfort and convenience features. 
Depending on the configuration you choose, it's capable of a range of up to 303 miles on a full charge and up to an impressive 320 horsepower
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