Vehicle Energy Performance Act of 2025

This bill creates a refundable tax credit for the purchase of a new (2027 model year or later) qualified high energy performance motor vehicle. The bill also modifies the calculation of the excise tax on the sale by a manufacturer or importer of a fuel-inefficient vehicle (known as the gas guzzler tax).

The amount of the tax credit for a new qualified high energy performance motor vehicle is based on a vehicle’s energy performance in the current and prior model year in comparison with the median and best vehicle energy performance overall in the prior model year, up to a maximum of $5,000.

To qualify for the tax credit, the vehicle must be a passenger automobile or light truck with a greater than median energy performance (based on miles per gallon-gas equivalent) as compared to the same passenger automobile or light truck for the prior model year. (Conditions apply.)

The bill requires the Department of the Treasury to publish the median and best vehicle energy performance for the model year based on information reported by vehicle manufacturers.

Finally, the bill modifies the gas guzzler excise tax so that the amount is based on a vehicle’s energy performance in the current and prior model year in comparison with the median and best vehicle energy performance overall in the prior model year. (Currently, the gas guzzler tax is imposed on vehicles that do not meet a fuel efficiency standard of at least 22.5 miles per gallon.)