Volkswagen ID.4 electric SUV will qualify for the full $7,500 tax credit, automaker says

Volkswagen’s flagship electric vehicle, the ID.4 crossover SUV, is eligible for the full $7,500 federal EV tax credit, the automaker announced Wednesday. The federal government’s list of eligible vehicles has since been updated to include all trim levels of the ID.4.

Volkswagen is currently the only international automaker to have a full battery electric vehicle that is eligible for the full credit. The ID.4 is assembled in Chattanooga, Tennessee, which is one of the prerequisites for eligibility. Earlier this week, the federal government released its list of EVs that qualify for the tax credit. The VW ID.4 was initially left off, but as of today, it’s back on.

“This is great news for consumers in the U.S. because it expands the choice of truly affordable EVs,” said Pablo Di Si, president and CEO of Volkswagen Group of America, in a statement.

The 2023 ID.4 comes in two battery sizes — 62kWh and 82kWh — and two powertrains. The ID.4 Standard model with a 62kWh battery and an EPA-estimated range of 209 miles starts at $38,995. The ID.4 Pro with an 82 kWh battery and a range of 275 miles starts at $43,995. With the full $7,500 tax credit, the ID.4 will be among the more affordable EVs currently on the market, along with the Chevy Bolt and Tesla Model 3 and Model Y.

The EV tax credit, as authorized by the Inflation Reduction Act of 2022, has strict rules around assembly, battery materials, and supply chain. In order to qualify for the full $7,500 credit, an electric vehicle and its battery would need to be sourced from and assembled in North America or a qualifying trade partner.

Initially, the ID.4’s battery pack, which is comprised of 288 pouch cells in 12 modules, was produced by South Korea’s LG Chem. But now, VW is using batteries supplied by SK Innovation, another South Korean company that recently opened a $2 billion factory nearby VW’s plant in Chattanooga.