With new restrictions in place, the 2023 Nissan Leaf S remains one of the few EVs that qualify for a $7,500 federal tax credit—at least until next year.
Whether it’s to save the planet or to
save money on gas, more and more people are switching to electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs). Not only have prices dropped, but the federal government is offering up to $7,500 in tax credits on the purchase of a brand-new EV or PHEV. To qualify under the new, stricter criteria, you’ll have to watch what you buy (and when you buy it).
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Is the Nissan Leaf still eligible for a federal tax credit?
Introduced in 2010, the original
Clean Vehicle Credittried to get buyers interested in EVs and PHEVs by offering a federal tax credit. The size of the credit was decided by the size of the car’s battery. Starting at $2,500, you got $417 for a capacity of five kilowatt hours (kWh), and another $417 for each kWh after that—a car with a battery of at least 16 kWh could qualify for a maximum of $7,500.
Fast-forward to 2022 and you can still get a credit if you pick the right car. What do we mean by that? Well, credits are capped at 200,000 sales per eligible model—since the
Model Y, and
Model 3all hit the limit in 2019, you can no longer get a credit on a new
Teslaand the same goes for an electric
With Nissan and Ford expected to join the club by the end of 2023, and the introduction of a new set of rules in August, the list of ineligible makes and models is growing. If you want to get a federal tax credit on a Nissan Leaf, time is running out.
What you should know about the new federal EV tax credit requirements
The Inflation Reduction Act of 2022, signed by President Biden in August, changed the rules of the Clean Vehicle Credit. Now, only
electric vehicles with final assembly in North Americaare eligible for a federal tax credit, disqualifying all but a handful of makes and models. Among them is the Nissan Leaf.
So far, so good, but you also have to meet a set of income and price requirements—if you’re a single-car buyer, you can make up to $150,000 per year; if you’re a breadwinner, $225,000; and if you and your spouse are joint earners, the maximum is $300,000. The car you’re buying must cost less than $55,000 (if it’s a sedan) or $80,000 (if it’s a truck, van, or SUV). Used vehicles should be priced at $25,000 or below, regardless of class.
As long as you meet the income requirements above, you’ll still qualify for a full tax credit on the purchase of a new Nissan Leaf. The only catch is that you have to buy it by the end of this year.
By the start of 2023, $3,750 of the tax credit will be restricted to cars with batteries containing
at least 40% "critical minerals" from North America or a US free-trade partner. The minimum amount increases by 10% each year, going up to 80% in 2027.
The same goes for components: at least half must be made in North America. As the years go on, the minimum percentage requirement will rise to 100% in 2029.
At the moment, there are no EVs or PHEVs on the market that meet these requirements. If you’re thinking of buying green, don’t wait.
Other electric vehicle incentives
If everything goes according to plan, more cars sold in the US will have parts and materials manufactured right here at home. In the meantime, there are plenty of other incentives you can apply to your new EV or PHEV. Go green with promotions offered by your hometown and state, plus commercial rebates and tax credits.
Is the Nissan Leaf worth buying?
The Nissan Leaf barely makes the list of the
top six compact EVs of 2023 on Car and Driverwith a 6.5/10, but it fared better with other critics.
JD Power rated it 73/100(with 72/100 for Quality & Reliability), putting it in fourth place among compact cars.
Consumer Reports gives it a 4/5for predicted reliability and RepairPal agrees, giving the Leaf an
above-average reliability rating of 4/5and an estimated annual repair cost of $748.
Its 215-mile driving range is on the short side, but the Leaf compensates with an appealing body, cabin, and $29,135 price tag. All the basics are here: Android Auto, Apple Carplay, and an eight-inch infotainment touchscreen.
Even better, Nissan’s Safety Shield 360 includes pedestrian detection, automated emergency braking, blind-spot monitoring, and rear cross-traffic alerts as standard features. An eight-year/100,000-mile battery warranty completes the package, making the Leaf a cheap and cheerful choice for urban drivers.
What to buy instead of a Nissan Leaf
EV sales are exploding, but few qualify for a tax credit under the new restrictions, and even fewer are as affordable as the Leaf. Check out these alternatives and what they have to offer:
If you want a cost-effective alternative: the 2023 Chevrolet Bolt EV
Starting price: $26,595
Clean Vehicle Credit: N/A (sales cap met in 2022)
With a starting price of under $27,000, the
Boltrepresents a great entry point for budget-conscious, eco-friendly drivers. To make up for the fact that it’s no longer eligible for a federal tax credit,
Chevrolethas slashed the price by $5,900 for 2023. Compared to 2021, that's an overall discount of $10,900!
According to the EPA, the Bolt's 200-hp motor can drive 259 miles per charge, which you can top up by 100 miles for every half hour you spend at a DC Fast Charging (Level 3) station. A 10.2-inch infotainment touchscreen, wireless Apple CarPlay, and Android Auto keep urbanites happy. Pedestrian detection, automatic emergency brakes, and lane-keeping assistance round out the package.
The Bolt’s biggest drawback is its low predicted reliability and no-frills design. Keep your expectations low and you’ll be happier for it.
If you don’t mind spending more: the 2022 Hyundai Ioniq 5
Starting price: $41,425
Clean Vehicle Credit: $7,500
Iconic looks? Check. Ample space? Check. A 12.0-inch touchscreen with Apple CarPlay and Android Auto? Check, check, check.
It’s bulky, but Hyundai’s generous complimentary maintenance plan (three years/36,000 miles) and powertrain warranty (10 years/100,000 miles) will make you forget all about it. With three power levels—168, 225, and 320 hp—the Ioniq 5 can travel up to 303 miles on a single charge. Not too shabby for the new kid on the block.
If you’re not ready to go all-electric: the 2023 Kia Niro PHEV
Starting price: $27,785
Clean Vehicle Credit: N/A (not assembled in North America)
Whether you like it or not, gasoline cars are here to stay, but that doesn’t mean they can’t benefit from going green. Case in point: plug-in hybrids. The
2023 Kia Nirocan draw on its battery to drive 33 miles on pure electricity and boost fuel economy to 53/54 mpg city/highway.
It takes less than three hours for a household outlet (Level 2) to charge the Niro and its wireless entertainment options. Standard forward-collision warnings, automatic emergency braking, and lane-keeping assistance technology make it a value-packed choice. As does a predicted reliability rating of 4/5 from Consumer Reports.
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