Ford Fusion Electric Car Tax Credit Guide 2024

The Ford Fusion Electric may qualify for up to $7,500 in federal tax credits in 2024, making it a smart, eco-friendly investment for budget-conscious buyers. Eligibility depends on battery components and assembly location, so verify current IRS guidelines before purchasing to maximize your savings.

Key Takeaways

• Verify eligibility: Check if your Ford Fusion qualifies for the 2024 tax credit.
• Act fast: Credits may phase out—claim yours before limits are reached.
• Keep documentation: Save purchase records for IRS verification and audit safety.
• Higher savings: New buyers get up to $7,500; used models qualify too.
• Income limits apply: Confirm your income meets requirements to claim the credit.
• State incentives stack: Combine federal credit with local rebates for bigger savings.

Understanding the Ford Fusion Electric Car Tax Credit: What You Need to Know

The electric vehicle (EV) revolution is accelerating, and with it comes a wave of government incentives designed to make sustainable transportation more accessible. Among these incentives, the Ford Fusion electric car tax credit stands out as a significant financial opportunity for buyers looking to transition from gas-powered cars to eco-friendly alternatives. Whether you’re a first-time EV buyer or upgrading your current model, understanding the nuances of this tax credit can save you hundreds—or even thousands—of dollars. In 2024, the landscape of EV incentives is evolving, with updated federal and state policies reshaping how credits are calculated, claimed, and transferred.

But here’s the catch: not all electric vehicles qualify, and the rules can be confusing. The Ford Fusion, particularly the Fusion Energi plug-in hybrid (PHEV) and the now-discontinued Fusion EV, have historically been eligible for tax credits, but changes in legislation—such as the Inflation Reduction Act (IRA) of 2022—have altered eligibility criteria. This guide will walk you through everything you need to know about the Ford Fusion electric car tax credit in 2024, including eligibility requirements, how to claim it, and how to maximize your savings. From income thresholds to battery component sourcing, we’ll cover it all with clear, actionable insights to help you make an informed decision.

How the Federal Electric Car Tax Credit Works in 2024

Overview of the Federal EV Tax Credit Program

Under the Inflation Reduction Act (IRA), the federal electric vehicle tax credit—officially known as the Clean Vehicle Credit—has been restructured to promote domestic manufacturing and battery supply chain sustainability. For 2024, the maximum credit remains $7,500 for new EVs and $4,000 for used EVs. However, eligibility is now based on a two-part test: critical minerals and battery components. To qualify for the full credit, a vehicle must meet both requirements. If it meets only one, the credit is halved.

The Ford Fusion Energi, as a plug-in hybrid with a battery pack, may qualify for a partial or full credit depending on its battery sourcing. While the Fusion EV (fully electric) was discontinued in 2019, the Energi model (PHEV) remains a popular choice and is subject to the same 2024 rules. Importantly, the credit is non-refundable, meaning it can reduce your tax liability to zero, but you won’t receive a refund for any excess. However, the IRA introduced a new option: credit transfer, allowing buyers to assign the credit directly to the dealership at the point of sale, effectively reducing the upfront purchase price.

Eligibility Requirements for 2024

• Vehicle Type: Must be a new plug-in hybrid (PHEV) or fully electric vehicle with a battery capacity of at least 7 kWh (the Fusion Energi exceeds this at 7.6 kWh).
• Manufacturer Sales Cap: Ford has not yet hit the 200,000-vehicle threshold that would phase out the credit, so all Ford EVs and PHEVs remain eligible.
• Buyer Income Limits: To claim the full $7,500 credit, your modified adjusted gross income (MAGI) must be:
  • Single filers: $150,000 or less
  • Married filing jointly: $300,000 or less
  • Head of household: $225,000 or less
• Vehicle Price Cap: For sedans like the Fusion Energi, the MSRP must not exceed $55,000 to qualify for the credit.
• Final Assembly Location: The vehicle must be assembled in North America. The Fusion Energi is built in Mexico, which qualifies under the USMCA trade agreement.

Example: Sarah, a single filer earning $140,000, purchases a 2024 Ford Fusion Energi with an MSRP of $52,000. The car meets the battery component requirement but only partially meets the critical minerals requirement. She qualifies for a $3,750 credit (half of $7,500) and can transfer it to the dealership, reducing her down payment.

Ford Fusion Energi vs. Fusion EV: Which Model Qualifies?

Discontinuation of the Fusion EV and Rise of the Fusion Energi

The original Ford Fusion EV (fully electric) was discontinued in 2019 due to limited demand and shifting market trends. Today, the Ford Fusion Energi—a plug-in hybrid—is the only Fusion variant eligible for tax credits in 2024. The Energi combines a 2.0L gasoline engine with an electric motor and a 7.6 kWh battery, offering 26 miles of all-electric range before switching to hybrid mode. While it doesn’t match the range of fully electric vehicles, its PHEV status makes it a practical choice for drivers who want electric benefits without range anxiety.

Unlike the Fusion EV, which had a larger battery and no gas engine, the Energi’s dual-power system allows it to qualify under the PHEV category of the federal tax credit. This means buyers can still benefit from the incentive, provided they meet all eligibility criteria. However, the Energi’s battery size and sourcing are critical factors in determining credit eligibility.

Battery and Component Sourcing: The Key to Qualification

The IRA requires that at least 50% of battery components (e.g., battery cells, modules) be manufactured or assembled in North America by 2024 to qualify for the first $3,750 credit. For the second $3,750, at least 40% of critical minerals (e.g., lithium, cobalt) must be sourced from the U.S. or free-trade agreement countries. Ford has made strides in this area:

• Ford’s battery partner, SK On, operates a plant in Georgia producing battery cells for North American EVs.
• Ford is investing in domestic lithium mining and recycling through its Ford Ion Park initiative.
• However, as of 2024, the Fusion Energi’s battery may not fully meet the critical minerals requirement due to reliance on global supply chains.

Tip: Before purchasing, check the Vehicle Identification Number (VIN) on the fueleconomy.gov website or ask your dealer for a Manufacturer Certificate of Compliance. This document confirms whether the Fusion Energi qualifies for the full, partial, or no credit.

State-Level Incentives: Boosting Your Savings Beyond the Federal Credit

State Tax Credits and Rebates

While the federal tax credit is the cornerstone of EV savings, many states offer additional incentives that can significantly reduce your out-of-pocket cost. These programs vary widely, but common types include:

• Point-of-Sale Rebates: Instant discounts at the dealership (e.g., California’s Clean Vehicle Rebate Project, or CVRP).
• Sales Tax Exemptions: Some states waive sales tax on EVs (e.g., Colorado, Massachusetts).
• State Income Tax Credits: Refundable or non-refundable credits (e.g., New York’s Drive Clean Rebate).
• HOV Lane Access: Free or discounted access to carpool lanes (e.g., Texas, Virginia).

For Ford Fusion Energi buyers, these state incentives can add up. For example:

• California: $2,000 rebate for PHEVs (income-qualified), plus $1,500 for low-income applicants. Combined with the federal credit, this could save you up to $9,500.
• Colorado: $5,000 state tax credit for PHEVs, no income cap. With the federal credit, total savings: $12,500.
• New York: $2,000 rebate for PHEVs, plus sales tax exemption (avg. 8.5%). On a $50,000 car, that’s an additional $4,250 saved.

Utility and Local Incentives

Don’t overlook incentives from local utilities and municipalities:

• Charging Discounts: Many utilities offer rebates for home EV chargers (e.g., $500 in Austin, TX).
• Time-of-Use Rates: Lower electricity rates for overnight charging (e.g., PG&E in California).
• Free Public Charging: Cities like Seattle and Portland offer free or discounted public charging for EV owners.

Example: Mike in Denver buys a Fusion Energi for $51,000. He claims the $3,750 federal credit (partial eligibility), the $5,000 Colorado tax credit, and a $500 Xcel Energy charger rebate. His total savings: $9,250, reducing his effective cost to $41,750.

How to Claim the Ford Fusion Electric Car Tax Credit (Step-by-Step)

Step 1: Verify Eligibility Before Purchase

Before signing the contract, confirm:

• The Fusion Energi’s MSRP is under $55,000.
• The VIN qualifies for the credit (check fueleconomy.gov).
• Your income is within federal limits.
• The dealer provides a Manufacturer’s Statement of Origin (MSO) with credit eligibility details.

Tip: Use Ford’s online tool or ask the dealer for a credit eligibility letter to avoid surprises.

Step 2: Choose Credit Transfer or Tax Filing

Under the IRA, you have two options:

1. Credit Transfer: Assign the credit to the dealership. The dealer reduces your purchase price upfront (e.g., $3,750 off the Fusion Energi). You must:
   • Sign an IRS Form 15400 (Buyer’s Acknowledgment).
   • Provide your SSN or EIN to the dealer.
2. Tax Filing: Claim the credit when you file your federal tax return using Form 8936 (Qualified Plug-in Electric Drive Motor Vehicle Credit).

Pro Tip: Credit transfer is ideal if you lack tax liability (e.g., retirees, low-income buyers). Otherwise, filing later gives you more control.

Step 3: File Your Taxes Correctly

• Attach Form 8936 and the dealer’s Statement of Credit Transfer (if applicable) to your tax return.
• Keep records: sales contract, MSO, and credit eligibility proof for 3 years.
• If you transferred the credit, the IRS will verify the dealer’s claim—ensure they report it correctly.

Warning: Misreporting can trigger an IRS audit. Consult a tax professional if unsure.

Maximizing Your Savings: Pro Tips for Ford Fusion Buyers

Combine Incentives Strategically

Layering federal, state, and local incentives can maximize savings. For example:

• Buy a used Fusion Energi (2017–2020) for under $25,000 to qualify for the $4,000 used EV credit (no price cap).
• Trade in a gas car for additional state rebates (e.g., California’s Clean Cars 4 All program).
• Time your purchase: Some states offer extra rebates during “Clean Air Month” (e.g., September).

Leverage Employer and Fleet Discounts

Many employers partner with Ford to offer EV discounts:

• FordPass Rewards: Earn points for test drives and referrals (redeemable for discounts).
• Corporate Lease Programs: Lower lease rates for employees (e.g., Ford’s Blue Advantage).
• Fleet Incentives: Nonprofits and small businesses may qualify for additional grants.

Consider Leasing for Immediate Credit Access

If you lease a Fusion Energi, the credit is applied to the lessor (Ford Credit), not you. However, the savings are often passed on via lower monthly payments. Ask the dealer to confirm this in writing.

Data Table: 2024 Ford Fusion Energi Tax Credit Breakdown

Factor	Requirement	Ford Fusion Energi Status	Credit Impact
Vehicle Type	PHEV or EV with ≥7 kWh battery	Yes (7.6 kWh battery)	Eligible
MSRP Cap	≤$55,000 (sedans)	$51,000–$54,000	Eligible
Final Assembly	North America (USMCA)	Mexico (qualified)	Eligible
Battery Components	≥50% North American	Partially met (estimated 45%)	$3,750 credit
Critical Minerals	≥40% U.S./FTA countries	Not met (global sourcing)	No additional credit
Buyer Income	≤$150,000 (single)	Applies to buyer	Full eligibility if met

Conclusion: Is the Ford Fusion Electric Car Tax Credit Worth It in 2024?

The Ford Fusion electric car tax credit remains a valuable tool for reducing the cost of going electric, but its benefits depend on your unique circumstances. While the Fusion Energi may not qualify for the full $7,500 federal credit due to battery sourcing, a partial credit of $3,750—combined with state rebates, charger discounts, and strategic planning—can still lead to substantial savings. For buyers in high-incentive states like Colorado or California, the total savings could exceed $10,000, making the Fusion Energi an attractive option in the PHEV market.

As you navigate the 2024 EV landscape, remember: knowledge is power. Verify eligibility early, explore all incentive layers, and consider the long-term benefits of reduced fuel and maintenance costs. The Fusion Energi may not be a fully electric vehicle, but its plug-in hybrid technology offers a pragmatic bridge to electrification—especially when paired with the right tax strategy. Whether you’re drawn to the environmental benefits, the financial incentives, or the smooth driving experience, the Ford Fusion Energi proves that going green doesn’t have to mean sacrificing practicality. With this guide in hand, you’re equipped to make a smart, savings-driven decision in 2024 and beyond.

Frequently Asked Questions

What is the Ford Fusion electric car tax credit amount in 2024?

As of 2024, the federal tax credit for the Ford Fusion Energi (plug-in hybrid) may qualify for up to $4,000, depending on battery capacity and IRS guidelines. Eligibility depends on your tax liability and whether Ford has met phase-out thresholds.

Is the Ford Fusion Energi eligible for the federal EV tax credit?

Yes, the Ford Fusion Energi may be eligible for the federal Ford Fusion electric car tax credit if purchased new and used as a primary vehicle. Confirm current eligibility with the IRS or a tax professional, as rules can change annually.

Can I claim the tax credit if I lease a Ford Fusion electric car?

No, the federal tax credit applies only to purchased vehicles, not leased ones. However, some leasing companies may factor the credit into lower monthly payments—ask your dealer for details.

Do state incentives combine with the Ford Fusion electric car tax credit?

Yes! Many states offer additional rebates or tax credits for plug-in hybrids like the Fusion Energi, which can stack with the federal Ford Fusion electric car tax credit. Check your state’s energy or DMV website for programs like California’s Clean Vehicle Rebate Project.

How do I apply for the Ford Fusion EV tax credit?

You’ll claim the credit when filing your annual federal tax return using IRS Form 8936. Keep your vehicle purchase documentation and the IRS’s certification letter for the Fusion Energi model year.

Does the tax credit apply to used Ford Fusion electric cars?

No, the federal tax credit is only for new vehicle purchases. However, some states offer separate incentives for used plug-in hybrids—research local programs to save on a pre-owned Fusion Energi.