Electric Cars That Qualify for Section 179

Section 179 of the Internal Revenue Code provides a tax deduction for businesses that purchase and place in service qualifying equipment. This incentive allows companies to write off the cost of assets in the current tax year rather than depreciating them over many years. While often associated with machinery or office furniture, this provision also extends to vehicles used for business purposes. The rules for vehicle deductions are specific, creating an advantage for heavier vehicles over typical passenger cars, which includes a growing number of electric vehicles that meet the criteria.

The GVWR Rule for Section 179 Vehicles

The primary factor for a vehicle’s Section 179 eligibility is its Gross Vehicle Weight Rating (GVWR). This is the maximum allowable total weight of a vehicle when fully loaded, as specified by the manufacturer, and can be found on a sticker on the driver’s-side door jamb.

Passenger automobiles with a GVWR of 6,000 pounds or less are subject to annual depreciation limits. For 2025, the first-year limit is $12,200, which can be increased by an additional $8,000 in bonus depreciation for a total of $20,200. This cap restricts the immediate tax benefit from a vehicle purchase.

The threshold is a GVWR over 6,000 pounds. Vehicles exceeding this weight are not subject to the same restrictive limits and are classified as “heavy” vehicles. They qualify for a much higher Section 179 deduction, allowing a larger portion of the cost to be expensed in the year of purchase.

Electric Vehicles Exceeding the 6,000-Pound GVWR Threshold

The weight of large battery packs has pushed many electric vehicles over the 6,000-pound GVWR threshold, making them eligible for more favorable Section 179 tax treatment. A number of all-electric models now qualify for a deduction far exceeding that of a standard gasoline-powered sedan or small SUV.

Several electric vehicles meet this weight requirement, including:

• Audi e-tron and its successor, the Q8 e-tron
• BMW iX
• Cadillac Lyriq
• Ford F-150 Lightning
• GMC Hummer EV
• Rivian R1T pickup and R1S SUV
• Tesla Model X

A business owner must confirm the GVWR of the specific vehicle they intend to purchase. Specifications can change between model years, and different trim levels or optional equipment can alter a vehicle’s final GVWR. A higher-capacity battery might push one version of a model over the limit while a base version falls short. Always verify the GVWR on the door jamb sticker before purchase.

Calculating Your Maximum Deduction

For heavy SUVs and crossovers with a GVWR over 6,000 pounds placed in service in 2025, the maximum Section 179 deduction is capped at $31,300.

Businesses can also claim bonus depreciation on the remaining cost of the vehicle. For 2025, the bonus depreciation rate is 40%. This allowance is scheduled to phase down in subsequent years and provides an additional first-year write-off.

These deductions are subject to two broader limits. The total amount a business can expense under Section 179 for all property is capped at $1,250,000 for 2025, and this phases out if total equipment purchases exceed $3,130,000. The deduction also cannot exceed the business’s net taxable income for the year, though any excess can be carried forward to future tax years.

A vehicle must be used more than 50% of the time for qualified business purposes to be eligible. If business use is between 51% and 100%, the deduction is prorated. For example, a qualifying electric SUV used 80% for business could claim a maximum Section 179 deduction of $25,040 (80% of $31,300). This business-use percentage must be tracked.

How to Claim the Section 179 Deduction

Claiming the Section 179 deduction requires substantiating business use with a detailed mileage log. The IRS requires this log to document the date, starting and ending mileage, and the specific business purpose for each trip.

The deduction is claimed by filing IRS Form 4562, Depreciation and Amortization, with the business’s annual tax return. Part I of this form is used for the Section 179 election, where you list the qualifying property, its cost, and the elected deduction amount. This form is filed with a primary tax return, such as a Schedule C or Form 1120.

This election must be made for the tax year the vehicle is purchased and placed in service. If business use of the vehicle drops to 50% or less in a subsequent year, the IRS may require a “recapture” of the deduction. This means a portion of the tax benefit previously claimed must be reported as ordinary income.