Is Ford Mustang Mach-E Electric eligible for tax credit?
Yes, the Ford Mustang Mach-E electric vehicle is eligible for a federal tax credit of up to $7,500. This credit is available to buyers of qualifying electric and plug-in hybrid vehicles as an incentive to promote the adoption of eco-friendly transportation options.
Eligibility for the Federal Electric Vehicle Tax Credit
The federal electric vehicle tax credit is a non-refundable tax credit that can be claimed by individuals who purchase a qualifying plug-in electric vehicle. To be eligible, the vehicle must meet certain criteria, including having a battery capacity of at least 5 kilowatt-hours and being primarily powered by an electric motor. The credit amount is determined by the vehicle's battery capacity, with a maximum credit of $7,500 for vehicles with a battery capacity of at least 16 kilowatt-hours.
The Ford Mustang Mach-E and the Tax Credit
The Ford Mustang Mach-E, an all-electric crossover SUV, is one of the vehicles that qualifies for the federal electric vehicle tax credit. The Mach-E has a battery capacity of 68 kilowatt-hours, which exceeds the minimum requirement for the full $7,500 credit.
To claim the tax credit, buyers of the Mustang Mach-E will need to file Form 8936 with their federal income tax return. The credit can be used to offset the buyer's tax liability, effectively reducing the cost of the vehicle.
Considerations for the Tax Credit
- The tax credit is only available for the first 200,000 qualifying vehicles sold by a manufacturer, after which the credit begins to phase out.
- The credit is non-refundable, meaning it can only be used to offset the buyer's tax liability and cannot result in a tax refund.
- The credit is subject to income limitations, with the full credit available only to individuals with a modified adjusted gross income (MAGI) below $250,000 (or $500,000 for joint filers).
Overall, the federal electric vehicle tax credit can provide a significant financial incentive for buyers of the Ford Mustang Mach-E and other qualifying electric vehicles. By understanding the eligibility requirements and limitations of the credit, buyers can make an informed decision about their purchase and maximize the potential savings.
Does Mach-E qualify for EV tax credit?
No, the Ford Mustang Mach-E does not qualify for the new federal clean vehicle tax credit for direct purchases due to battery sourcing requirements. However, it may qualify for a leasing incentive through a pass-through credit from Ford. For business owners, a separate credit of up to $7,500 was available for the 2023 model year for purchases, but this may have changed and is specific to business use.
For individual buyers
- Direct purchase: The Mach-E is ineligible for the federal clean vehicle tax credit for direct purchases because it does not meet the battery component sourcing rules.
- Leasing: You may be able to receive a credit by leasing the vehicle. Ford passes the incentive on to the customer, but it is available only through the lease agreement, not a direct purchase.
For business owners
- 2023 models: Businesses could claim a $7,500 tax credit for purchasing a 2023 Mach-E.
- Availability: Availability and eligibility may have changed for subsequent model years, so it is best to check with the dealership or a tax professional.
Key takeaways
- The Mach-E is no longer eligible for the individual federal tax credit, even if it meets MSRP limits and other criteria.
- Leasing is the only way for individuals to potentially receive a federal incentive on a new Mach-E.
- Businesses may be able to claim a tax credit for certain models, but eligibility can change year to year.
What electric cars qualify for the $7500 rebate?
Which EVs and PHEVs Are Eligible for a Federal Tax Credit?
| Model Year/Vehicle | Credit Available | Retail Price Cap |
|---|---|---|
| 2024-26 Chevrolet Equinox EV | $7,500 | $80,000 |
| 2025-26 Chevrolet Silverado EV | $7,500 | $80,000 |
| 2024-25 Chrysler Pacifica PHEV | $7,500 | $80,000 |
| 2023-25 Ford F-150 Lightning EV | $7,500 | $80,000 |
Why is Ford discontinuing Mach-E?
The Ford Mustang Mach-E isn't selling well due to a combination of issues, including a recent stop-sale order caused by a software defect that can trap occupants, previous recalls for safety-related problems, and broader market factors like intense competition and a high price point. While Ford has tried to boost sales with discounts, the vehicle still faces slow sales compared to its competitors and the industry average, notes CarBuzz.
Immediate and recent issues
- Stop-sale order: In June 2025, Ford halted sales of the Mach-E because a software defect could cause the doors to malfunction, potentially trapping occupants inside or outside the vehicle.
- Recalls: The Mach-E has been the subject of multiple recalls for various issues, including a potential for the vehicle to not start or lose power, improper seat belt attachments, and loose subframe bolts.
Broader market factors
- Competition: The Mach-E faces stiff competition, particularly from the Tesla Model Y, which is often seen as a more affordable and popular alternative.
- Pricing: The Mach-E's higher price point, even with discounts, makes it a harder sell than some competitors.
- Depreciation: EVs, in general, tend to depreciate faster than internal combustion engine vehicles, which can deter potential buyers.
- Market slowdown: The entire new car market has experienced a slowdown, with even the Mach-E's slower-than-average sales pace contributing to dealer inventory challenges.
Which EV does not qualify for tax credit?
Several electric and plug-in hybrid vehicles are no longer eligible for a federal tax credit in 2025. The Chevrolet Bolt EV, Nissan Leaf Rivian R1S and Volkswagen ID.
