Which EVs qualify for the $10K auto-loan interest deduction?

Why US final assembly is the whole ballgame

The One Big Beautiful Bill Act ended the $7,500 new-EV credit (§30D) and the $4,000 used-EV credit (§25E) on September 30, 2025. What it created in their place is a deduction for interest paid on a qualifying vehicle loan — available for tax years 2025 through 2028, worth up to $10,000 of interest per year. It applies to any fuel type, so it isn't an EV incentive as such, but it's the closest thing EV buyers have left. Our EV tax credit 2026 guide covers all the rules and has an eligibility checker tool.

For an EV shopper, almost every eligibility gate is easy to clear — buy new, finance it with a secured loan, keep your income under the phase-out. The gate that trips people up is final assembly in the United States. This is a stricter test than the tariff rules: a car built in Mexico or Canada gets partial tariff relief under USMCA (see our EV tariffs explainer), but for this deduction, North America isn't good enough — it has to be the United States. That single distinction knocks out some of the most popular "American-brand" EVs on the market, like the Mexico-built Mustang Mach-E and Chevy Equinox EV.

EVs with US final assembly (can qualify)

These 23 new EVs on sale in 2026 are final-assembled in the US, so they clear the assembly test. Assembly locations were verified in July 2026; they can change, and the deduction still depends on the rest of the rules and on your specific VIN — this is a shortlist to verify, not a guarantee. The cheapest of them is the all-new 2027 Chevrolet Bolt EV, which starts at $28,995.

Note on two US-built EVs that just left production: the Ford F-150 Lightning (Dearborn, MI) and Volkswagen ID.4 (Chattanooga, TN) were both US-assembled, but new production has ended (Lightning in December 2025, ID.4 in April 2026). A leftover new US-built example bought on a qualifying loan could still pass the assembly test — but confirm the VIN, since some earlier ID.4s were German-built.

Edge cases — check the VIN, not the badge

Some models are genuinely split: the same nameplate can be US-assembled or imported depending on the exact vehicle, the trim, or the model year. For these, the badge tells you nothing — only the VIN does.

• Genesis Electrified GV70 — dual-sourced. It's built both in Montgomery, Alabama and in Ulsan, South Korea. Two GV70s on the same lot can have opposite answers, so the VIN is the only way to know. Its Genesis siblings — the GV60 and Electrified G80 — are Korea-only and don't qualify.
• Hyundai Ioniq 5 — moved to the US, but recently. New Ioniq 5s are built at Hyundai's Georgia Metaplant, but production only shifted there from Korea for the 2025 model year. A new one should be US-built; still confirm the VIN doesn't start with "K" (Korea).
• Cadillac — three qualify, one doesn't. The Lyriq, Vistiq, and Escalade IQ are US-built; the smaller Optiq is built in Mexico and does not qualify.
• Chevrolet — split down the middle. The Silverado EV and new Bolt are US-built; the Equinox EV and Blazer EV are built in Mexico and don't qualify.
• Mercedes-Benz EQ — SUVs yes, sedans no. The EQE SUV and EQS SUV are assembled in Tuscaloosa, Alabama; the EQE sedan, EQS sedan, and CLA are built in Germany.
• Volvo & Polestar — only the big SUVs. The Volvo EX90 and Polestar 3 are built in South Carolina; the Volvo EX30/EX40 and the Polestar 4 are imported.
• Nissan Leaf — it flipped. The previous-generation Leaf (2018–2025) was US-built in Smyrna, Tennessee, but the all-new 2026 Leaf for the US is imported from Japan. Same nameplate, opposite answer — and used ones don't qualify anyway.

Imported EVs that don't qualify (26)

These EVs are on sale in the US but final-assembled abroad, so the loan-interest deduction is off the table no matter how the loan is structured. Mexico and Canada count as "abroad" for this test — a common and costly point of confusion.

How to verify your exact vehicle

Because the IRS tests the individual vehicle, don't rely on a list — check the VIN. There are two IRS-accepted ways to prove US final assembly:

• The VIN's plant of manufacture, and
• The final-assembly point on the vehicle's label (usually on the driver's-side door jamb).

Quick screen from the first character of the VIN: 1, 4, 5, 70, or 7F–7Z means a US plant (the 7-range is why Tesla's Texas-built cars, whose VINs start "7SA," count). 2 is Canada, 3 is Mexico, J is Japan, K is Korea, and W is Germany. The authoritative tool is the free NHTSA VIN Decoder, which the IRS's OBBBA guidance points taxpayers to. You must include the VIN on your return when you claim the deduction.

How much is it actually worth?

It's a deduction, not a credit, so it lowers your taxable income rather than your tax bill directly. The value is your marginal tax rate times the interest you paid. Here's a middle-of-the-road EV example, with the math shown so you (or your CPA) can check it:

So the first-year benefit on a typical $45k EV loan is roughly $649–$708, not the full $10,000 cap — the cap only bites on very large or very high-rate loans. And because auto-loan interest is front-loaded, the deduction shrinks every year as you pay down the balance (about $2,500 of interest in year two, less after that). The deduction also only exists for tax years 2025–2028, so a loan taken out in 2026 gets at most three bites at it.

A note on income: the deduction phases out $200 for every $1,000 of MAGI above $100,000 (single) or $200,000 (married filing jointly), and disappears entirely at $150,000 / $250,000. A single filer at $120,000 MAGI, for instance, loses $4,000 of the potential deduction before the interest cap even applies.

Frequently asked questions