The Rise of the Plug-In Hybrid
As the automotive landscape shifts towards electric vehicles (EVs), many drivers are exploring alternatives to traditional gasoline-powered cars. One popular option is the plug-in hybrid (PHEV). Designed to offer a stepping stone toward full electrification, PHEVs combine a gasoline engine with an electric motor and a battery that can be charged via a plug.
While offering the convenience of a gasoline engine for longer trips, PHEVs also allow drivers to experience electric-only driving, typically for 20 to 60 miles depending on the model. In this way, they combine features of regular hybrids, which lack a plug, and fully electric vehicles.
Federal Tax Credits for PHEVs: A Narrow Field
Currently, some PHEVs are eligible for a federal tax credit, potentially lowering the purchase price. However, the eligible models are fewer than those available on the market. This is primarily due to evolving regulations and changes in the criteria required to claim the credit.
As of now, only the Chrysler Pacifica Plug-In Hybrid qualifies for the federal tax credit. This is subject to change, as well as other federal policies that affect the credit, such as those proposed under the Trump administration.
2025 Updates to Tax Credit Rules
There are important requirements manufacturers must follow. Starting January 1, 2025, batteries used in PHEVs must not be manufactured or assembled in China, Russia, Iran, or North Korea, nor may they contain components made in those countries, in order to qualify for federal credits. This rule affects many manufacturers due to their supply chains.
The Chrysler Pacifica Plug-In Hybrid: The Sole Qualifier
The Chrysler Pacifica Plug-In Hybrid is currently the only PHEV model eligible for the full $7500 federal tax credit. This minivan offers practicality with seating for up to seven passengers, numerous cupholders and storage compartments, and the added benefit of electric driving.
The Pacifica’s powertrain combines a 3.6-liter V-6 gasoline engine with two electric motors. This system produces 260 horsepower and is paired with a 16.0-kWh lithium-ion battery pack that offers an estimated 33 miles of electric range. The front-wheel-drive model has a starting price of $52,750.
Important Note:
- Federal Tax Credit: $7,500. This could be subject to change, so it is important to consult with a tax professional before making a purchase.
About the Author
Jack Fitzgerald is the Associate News Editor at Car and Driver. He is a car enthusiast with a significant interest in Formula 1 racing.
