Volkswagen announced that the 2023 model year Volkswagen ID.4, assembled in Tennessee, is eligible for full $7,500 federal tax credit in 2023.

According to the German manufacturer, who refers to, to date, "Volkswagen is the only foreign automaker that has a full battery electric vehicle that is eligible for the full Federal Tax credit, thanks to local assembly and sourcing."

Let's recall that not only is the Volkswagen ID.4 locally produced at the plant in Chattanooga, Tennessee, but also its lithium-ion battery cells are locally produced (by SK Innovation's SK On) in Georgia.

Volkswagen says also that with the $7,500 incentive, the ID.4 is extremely affordable and competitive with conventional compact SUVs. In Q1 2023, it was already the fourth best-selling electric car in the US (9,758 units delivered).

Pablo Di Si, President and CEO of Volkswagen Group of America said:

“This is great news for consumers in the U.S. because it expands the choice of truly affordable EVs. The ID.4 is already one of the lowest-priced electric SUVs on the market, and the $7,500 Federal Tax Credit makes it even more attainable. This shows that we made the right decision to localize production of the ID.4 in Tennessee and invest even further in battery production, components and innovation. Every ID.4 sold supports thousands of American jobs and helps advance our goal of a carbon-neutral future.”

The 2023 Volkswagen ID.4, with a 62-kilowatt-hour (kWh) battery, starts at an MSRP of $38,995, while the 82-kWh battery version starts at $43,995. When including the $1,295 destination charge and deducting the $7,500 federal tax credit, the effective price happens to be respectively $32,790 and $37,790.

The 62-kWh battery version has an EPA Combined range of 209 miles, while the bigger battery allows it to go 275 miles (255 miles in the all-wheel-drive version).

So far, we saw a few other manufacturers confirming their eligibility for the federal tax credit:

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