Buy an ID.4 Before the Tax Credit Goes Away

“All good things must come to an end.” This saying highlights the topic of this post: the Federal Tax Credit for EVs. The EV tax credit is ending on September 30, 2025, so if you’ve been considering a Volkswagen ID.4, this September is the best time to act. Bud Brown Volkswagen shares more details. 

The Federal Tax Credit was enacted to help encourage average consumers to purchase an EV, rather than a vehicle powered by an internal combustion engine, as a means of reducing overall carbon emissions produced by people’s daily driving routines. The EV tax credit was carefully crafted to ensure the incentive would benefit vehicles that help create or sustain North American jobs. Therefore, the vehicle must be assembled in North America with a battery that is not sourced from China. Batteries from Russia, Iran, and North Korea are also prohibited, but China is a larger battery producer than all those other countries combined.  

The credit was also designed not to subsidize high-end luxury models, so there is a price cap of $55,000 MSRP for cars and $80,000 MSRP for SUVs, crossovers, and light trucks. Similarly, the tax credit was not meant to subsidize individuals making millions of dollars a year, so there are income limits for buyers, though they are quite generous. 

• Married filing jointly: $300,000 

• Head of household: $225,000 

• All other filers: $150,000  

It is no secret that all automotive dealers want you to “Buy today!” but here are 7,500 good reasons to purchase an ID.4 before the end of September. The ID.4 — the model that Inside EVs named as “The best EV for families”—qualifies for the full $7,500 tax credit. Even before the tax credit was introduced, Volkswagen chose Chattanooga, Tennessee, for all ID.4 models destined for North America, and its battery is built by a joint venture of LG Energy Solution and SK On at a factory in Georgia. Plus, the ID.4 has a starting MSRP range from $45,095 for a rear-wheel-drive Pro model and maxes out at $57,295 for the AWD Pro S Plus. Thus, the entire ID.4 range qualifies for the full $7,500 tax credit, as long as the purchase date is on or before September 30, 2025. 

Initially, the tax credit was reflected as a tax reduction on your return for the year you bought the vehicle, as indicated on Form 8936. You can still do that, but to make the credits more useful during the vehicle purchase, you can transfer the credit to the dealer as part of a lower overall purchase price, which you can even use as part of the down payment.  

Keep in mind, an ID.4 is also less expensive to operate. Compare it to the similarly sized gas-powered Tiguan. The EPA estimates the Tiguan uses about 3.4 gallons to cover 100 miles. With the current average gasoline price in Olathe, KS, of $3.26 per gallon, the Tiguan costs about $11.08 to drive 100 miles.  

Olathe enjoys an electricity rate roughly 17% lower than the national average, averaging 15 cents per kilowatt-hour. The ID.4 has a combined MPGe of 102, based on equal energy to a gallon of gasoline, and is estimated to need 33 kWh to travel 100 miles. Consequently, it costs about $4.95 to drive 100 miles in an ID.4. This amount is approximately 45% of the operating cost of a Tiguan or similar compact crossover, and there is almost no drivetrain maintenance. 

It is not hyperbole to say that this month is the best time to purchase a new VW ID.4, and the Bud Brown inventory has several models in stock from which to choose. Visit Bud Brown Volkswagen, and test drive the ID.4 before the incentive expires.