EV Incentives and Rebates
If you are thinking about purchasing a new plug-in hybrid or all-electric vehicle, there are a number of incentives and rebates that will help drop the cost of the vehicle. These EV incentives are available for federal, state, and local credits. These government-offered rebates were created to promote the sale and ownership of electric vehicles. According to the U.S. Energy Administration, 76 percent of all oil consumed in the United States is used to fuel gasoline-powered vehicles.
The electricity used to power EVs is mostly produced by domestic electric companies through the use of coal, natural gas, and renewable sources such as wind and solar power. By using diverse energy sources, America is able to maintain a more stable energy infrastructure and cut our dependence on foreign oil.
Federal EV Tax Incentive
The Federal government in the United States gives you tax credit when you purchase a plug-in hybrid or all-electric car. You can take up to $7,500 off the cost of the vehicle just from this one EV tax credit alone. But your vehicle has to qualify.
Under the provisions, up to $7,500 is available for new electric vehicles, and there is now a credit of up to $4,000 for used electric vehicles, which can make buying an EV even more affordable for some drivers. However, price caps are in place: passenger cars priced at over $55,000 and vans, trucks, and SUVs priced at over $80,000 are not eligible for credits.
Only vehicles whose final assembly is completed in North America qualify for clean energy vehicle credits. This means that many vehicles that previously qualified for clean energy incentives are no longer eligible. Furthermore, vehicles must meet new critical mineral and battery component requirements for a credit of:
- $3,750 if the vehicle meets the critical minerals requirement only
- $3,750 if the vehicle meets the battery components requirement only
- $7,500 if the vehicle meets both
A vehicle that doesn't meet either requirement will not be eligible for a credit – if you purchase the vehicle outright or finance it. However, if you lease, you may be eligible for the full credit, no matter where the vehicle or its components is sourced from. Starting in 2024, dealers can now apply the tax credit directly to your deal as a discount, so you don’t have to apply for the credit later.
You can look up the most current list of vehicles on the GreenCars EV Incentive Tool or at this list here. Don't forget that there are state and local EV incentives and rebates that you can add to your savings.
State EV Incentives
Each state has different rules for the EV tax credits they offer based on eligibility. Some of the most EV-friendly states that offer EV incentives include Colorado that offers $2,500 toward the purchase of an EV. Connecticut will give you $2,000. Delaware offers rebates of $1,500 when you buy a plug-in hybrid and $3,500 on a new all-electric vehicle. Maryland pays you a rebate based on the size of the battery pack with a cap of $3,000. California gives you a $2,500 rebate for all plug-in hybrid and all-electric vehicles, Massachusetts offers $1,500 for plug-in hybrids and $2,500 for all-electric vehicles. Oregon hands out a cash rebate of $2,500 for purchase or lease of a plug-in hybrid or all-electric car.
You’ll find a complete list of states providing EV incentives here: https://afdc.energy.gov/fuels/laws/ELEC
Other EV Incentives
You’ll find other EV incentives on the price of kilowatt hours based on local utilities. Many electric utility companies offer rebates and special incentives to EV owners. You’ll also find discounts on electric vehicle charging at local charging stations. Look for savings on EV charging in your town.
Keep in mind that the EV Incentives landscape is ever-changing. To find out which of the latest specific EV incentives you qualify for on a particular vehicle, visit our EV Incentives Tool.
