How do EV Incentives Work?
You’ve probably heard of the federal tax credit - which gets you up to $7,500 on certain plug-in hybrid and all-electric vehicles.
Under the new 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 no longer 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. New 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 or finance the vehicle; you can probably still get the full credit if you lease. Even better, your dealer can now apply the tax credit directly as a discount, so you don’t have to apply for the credit with the IRS later.
You can use the GreenCars EV Incentive Tool to find out what incentives you’re eligible for, based on what car you are considering.
State and Local EV Incentives
Many states and local governments also have programs to help get you into a more fuel-efficient vehicle. These incentives come in the form of state tax credits, rebates, reduced vehicle taxes, and even exemptions from inspection fees and registration fees.
California has the most EVs of any state, they also offer the most support for those who are interested in driving green. The state’s Clean Vehicle Rebate Project can get California residents an additional $7,000 in state incentives.
To find out what incentives are available in your state, visit the U.S. Department of Energy’s list of state EV incentives here. https://www.fueleconomy.gov/feg/taxevb.shtml
Local Utility Incentives
Many local electric utility companies are jumping on the EV bandwagon, offering incentive programs for new EV owners. Some companies offer a rebate of as much as $2,500 to customers who purchase an EV and home charging station. Others offer a discount on electric rates for charging your EV outside of peak hours.
Interested in a specific EV and want to know which incentives you qualify for? Use our EV Incentives Tool right here on GreenCars.
