The US Internal Revenue Service (IRS) has issued Notice 2025-9 on the Section 45W Credit for Qualified Commercial Clean Vehicles and Incremental Cost for 2025.
This notice provides safe harbours regarding the incremental cost and retail price equivalent (RPE) of certain qualified commercial clean vehicles for purposes of the credit for qualified commercial clean vehicles under section 45W of the Internal Revenue Code (Code).
Section 13403(a) of Public Law 117-169, commonly known as the Inflation Reduction Act of 2022, added section 45W to the Code to allow a credit for qualified commercial clean vehicles (section 45W credit).
Under section 45W, the maximum credit allowed is USD 7,500 for a qualified commercial clean vehicle that has a gross vehicle weight rating (GVWR) of less than 14,000 pounds and USD 40,000 for all other vehicles.
For this purpose, clean vehicles include battery electric, plug-in hybrid electric, and fuel-cell electric vehicles.
The section 45W credit is effective for vehicles acquired after 31 December 2022 and before 1 January 2033.
