Although new electric vehicles (EVs) have had a higher sticker price than gasoline-powered cars, new EV prices are falling. Research from Kelley Blue Book shows that new EV prices are down almost 20% from June 2022. With EV sales accounting for 7% of U.S. car sales this year, going electric is more affordable than ever.
EVs offer clear environmental and ownership benefits, producing fewer emissions over the life of the vehicle compared to internal combustion cars and trucks, but your local source of electricity is an important factor to consider. If your energy comes from burning fossil fuels, an EV will contribute to CO2 emissions. With fewer moving parts and no dirty combustion, electric vehicles are less expensive to own and maintain.
But the cost of new EVs remain a barrier for many. Several electric cars and compact SUVs are available for under $40,000, and some qualify for up to $7,500 in EV tax credits. Read on to learn about how to find the best electric car or SUV for under $40,000 in 2023 or 2024.
2023 Chevy Bolt EV
Starting price: $26,500
Qualifies for EV tax credit: Yes, up to $7,500
Vehicle range: 259 miles
The price of a 2023 Bolt has fallen $10,000 over the last several years and is eligible for the $7,500 tax credit because it is manufactured domestically in Michigan. An economical EV, the Bolt is also quite zippy and can go from 0 to 60 mph in 6.5 seconds. This hatchback has a miles per gallon equivalent (MPGe) of 120, which makes it one of the most efficient EVs on the market.
Although Chevy initially announced it would discontinue the Bolt, it later reversed this decision and said it would revamp it. However, Chevy has plans to repurpose the Orion assembly plant to manufacture the new Silverado EV. So, it isn’t entirely clear if there will be a 2024 Bolt EV, but a 2025 update looks quite likely.
Another option is a low-mileage used Bolt, which could qualify for a $4,000 used EV tax credit if it is priced under $25,000.
2024 Nissan Leaf
Starting price: $29,235 for small battery; $36,190 for large battery
Qualifies for EV tax credit: No
Vehicle range: 149 miles/212 miles
This compact hatchback is economically priced and reasonably comfortable. However, it does have a much shorter range than the Bolt or other models under $40,000. Although the SV Plus model has a 212-mile range, its starting price is considerably higher. Plus, it isn’t eligible for the EV tax credit because Nissan manufactures the vehicles overseas.
2024 Chevy Equinox EV
Starting price: Around $30,000
Qualifies for the EV tax credit: Yes, up to $7,500
Vehicle range: 250 miles/300 miles
The Chevy Equinox EV is spacious and features modern technology. This midsize SUV should be available this fall and the full lineup will be introduced by spring 2024, all will reportedly carry affordable price tags. However, Chevy hasn’t announced its final pricing yet.
High-end models will provide all-wheel-drive and a longer driving range.
2024 Electric Mini Cooper
Starting price: $29,900
Qualifies for EV tax credit: No
Vehicle range: 110 miles
The stylish electric Mini Cooper is economical but comes with a small driving range. That said, the average distance Americans drive is only 37 miles, so the Mini’s range is more than enough for commuting, shopping, and around-town trips.
With limited cargo space, the Mini may not be ideal for large households. And because it doesn’t qualify for the EV tax credit, it isn’t necessarily more affordable than other more spacious EVs with a longer range.
2024 Hyundai Kona Electric
Starting price: around $35,000
Qualifies for EV tax credit: No
Vehicle range: Around 260 miles
Hyundai has given the 2024 Kona Electric a makeover, and it will be roomier than the 2023 model. The Kona combines long-range driving and an economical price, but we don’t have all the details on the 2024 model. The 2023 Kona Electric had a combined MPGe of 120, making it efficient and practical.
2024 Volkswagen ID.4
Starting price: around $40,000
Qualifies for EV tax credit: Yes, up to $7,500, MSRP limit $55,000
Vehicle range: 209 miles
The 2024 Volkswagen ID.4 is worth a look even on a limited budget because it qualifies for the EV tax credit. Volkswagen assembles the ID.4 in Tennessee. This electric SUV delivers a 209-mile range, and the ID.4 Pro model can go 275 miles on a charge.
EV drivers report that they enjoy the roomy seating and smooth ride. Plus, there are many standard driver-assist features, such as adaptive cruise control, automatic emergency braking, and automatic parking.
2024 Kia Niro EV
Starting price around: $40,000
Qualifies for EV tax credit: No
Vehicle range: 253 miles
The second-generation Niro EV will likely closely resemble the popular 2023 Niro EV. It has a spacious interior with ample cargo space. The cold weather package includes a heat pump to help maintain vehicle range in cold weather.
What EVs qualify for the $7,500 tax credit?
EVs priced less than $55,000 or $80,000, depending on the type of vehicle, from Ford, GM (GMC, Chevy, Cadillac, Buick), Tesla, Rivian, and Volkswagen all qualify for the new EV tax credits. Electric vehicles from Kia, Hyundai, Nissan, and Toyota do not meet the criteria for the tax credit.
An EV must be assembled in North America to be eligible for the tax credit. Additionally, they must meet critical mineral and battery component requirements, the car weight must be less than 14,000 pounds, and have a battery capacity of at least 7 kWh. Also, the credit is available only to individuals earning less than $150,000 a year or four couples with an income of less than $300,000.
What is the cheapest electric car on the market?
Currently, the Chevy Bolt EV is the lowest-priced battery electric vehicle in the U.S., especially for car buyers who qualify for the federal EV tax credit. However, Chevy might not put out a 2024 Bolt EV, but the 2024 Chevy Equinox EV will start at around $30,000 and qualify for the EV tax credit. In addition, the Electric Mini Cooper and Nissan Leaf begin at about $30,000 but don’t qualify for the EV tax credit.
Numerous EVs Under $40,000
Car shoppers have numerous options for electric cars and compact SUVs with long ranges in 2023 and 2024. In fact, some vehicles come in well under $30,000 after applying the federal EV tax credit. Also, the cost of owning an EV is usually lower because it requires less maintenance, and drivers save on fuel costs.