Understanding EV Tax Credits & the VXC Program (Updated July 2025)
Federal EV Tax Credit
- New EVs: Up to $7,500 tax credit.
- Used EVs: Up to $4,000.
- These credits may be applied at point-of-sale via dealer assignment.
⚠️ Deadline: Both credits now expire September 30, 2025. To qualify, purchase or lease and take delivery by September 30th, 2025!
Recent legislation passed by Congress on July 3, 2025, as part of a broader budget package, has accelerated the expiration of the federal EV tax credits. Under the new law, both the $7,500 credit for new electric vehicle purchases or leases and the $4,000 credit for used EVs will officially terminate on September 30, 2025, cutting short the extensions originally planned through 2032 under the Inflation Reduction Act.
Colorado Innovative Motor Vehicle Credit
- $3,500 credit for new BEVs/PHEVs (MSRP ≤ $80k), plus an additional $2,500 if MSRP ≤ $35k.
- The new vehicle credit becomes $3,850 if you finance through VWFS and choose to assign at the point-of-sale.
- These credits may be applied at point-of-sale via dealer assignment.
⚠️ The Colorado Innovative Motor Vehicle Credit has not yet been ratified in the 2026 state budget plan. Announcements are expected later in 2025.
Vehicle Exchange Colorado (VXC) Program
The VXC program helps income-qualifying Coloradans trade in an old/high‑emitting vehicle for a rebate on a new or used EV at approved dealers.
Eligibility Requirements ✅
- Colorado resident, age 18+, with valid CO driver’s license/address.
- Income ≤ 80% AMI or enrolled in qualifying assistance programs (e.g., SNAP, SSI, Medicaid).
- Old vehicle must be ≥12 years old or fail emissions, gasoline/diesel, currently titled & lien-free in your name CO DMV.
Rebates 📋
- New BEV/PHEV: $6,000
- Used BEV/PHEV: $4,000
- New EV MSRP cap: $80,000; Used EV final negotiated price cap: $50,000. Rebate is a point-of-sale discount at authorized dealers and can stack with federal & Colorado credits.
Application & Redemption 🔁
✔️ You can stack the VXC program with the $7,500 federal and up to $3,500 Colorado incentive—totaling up to $17,000 in credits and rebates!
- Register and apply via the VXC portal.
- Application reviewed (~10 business days); rebate issued upon approval.
- Rebate must be redeemed at dealership within 90 days.
Opportunity Snapshot
| Incentive | Amount | Deadline |
|---|---|---|
| Federal | $7,500 (new) / $4,000 (used) | Sept 30, 2025 |
| Colorado State | $3,500 | Active (may change in 2026) |
| VXC Program | $6,000 (new) / $4,000 (used) | Program active through 2032 |
Total potential savings: up to $17,000!
Delivery must be completed by Sept 30, 2025 to secure federal credits—don’t wait!
Give us a call at (720) 664-7691 to confirm eligibility and vehicle availability.