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Overview of EV Incentives

By
Dave Nichols
3
min
Jan 2024
Electric vehicle incentives are saving many buyer's thousands of dollars on the purchase of a plug-in hybrid or all-electric vehicle. To learn more about them, here’s how EV incentives work.
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EV Incentives Overview

There are federal, state, and local programs in place to help people get into electric vehicles. From plug-in hybrid to all-electric vehicles, there are many ways to save money on your EV purchase. The federal EV tax credit alone could get you up to $7,500 off the cost of your new car, depending on the model.

There are state rebates as well. California, for instance, has a Clean Vehicle Rebate and a Clean Fuel Reward driving green. Banks are providing low interest loans for EVs, a group called Clean Cars for All is offering up to $9,500 to low-income drivers to get them to make the switch, and the Community Housing Developing Corp. is throwing in up to $5,000 to incentivize new EV owners.

Besides helping to lower the cost of the cars themselves, there are Charging Stations incentives such as the Pace Loss Reserve Program in California, and electricity discounts from power companies such as PG&E and Silicon Valley Clean Energy to help with your electric bill. There are also EV perks such as that electric vehicles can use the High Occupancy Vehicle (HOV) lanes in California, get free parking, and clean vehicle toll discounts. Find out more about all these at https://www.electricforall.org/rebates-incentives/

The U.S. Department of Energy offers a guide to EV incentives in every state here https://afdc.energy.gov/laws/search

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Federal Tax Credits for Electric Cars

In August 2022, Congress passed new legislation, which altered credit amounts and eligibility requirements for clean energy vehicles, including electric vehicles and plug-in hybrids.

Under the Inflation Reduction Act, 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.

Under the new Act, 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 – at least if you purchase it outright. If you lease, almost any vehicle still qualifies, and dealers can now apply the tax credits at the time of purchase, instead of you having to apply for them at tax time.

Keep in mind that the EV Incentives landscape is ever-changing. You can find the most up-to-date information in the GreenCars Incentive tool.

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