Our last ATC blog post covered electric vehicle registration fees added by the states to make up for lost gas tax revenues, since EVs don’t pay them. In this post, we will inform you about tax incentives for EV purchases.
EV adoption is increasing, and the federal government recently enacted a ten-year extension of federal tax credits under the Inflation Reduction Act for people buying an EV. There are also numerous state EV tax credits available as well as discounts or money back on EV charger installations.
Obviously, federal tax credits apply to the entire U.S. whereas state credits and rebates do not. As defined by the Inflation Reduction Act, consumers may qualify for up to $7,500 in federal tax credit for an electric vehicle, but the credit will vary based on the capacity of the battery used to power the vehicle.
To see how much of a credit is available on the many different EV and PHEV models available, check out this helpful site created by the U.S. Department of Energy.
Now, turning to the states, it would take a long time for us to cover all the rebates, tax incentives, and rebates state by state, but this site has already done it. Check it out to learn what is available in your state (or in states to which you send a lot of happy buyers).
By the way, the Inflation Reduction Act has added some new incentives for EVs including:
- A new tax credit up to $4,000 on used EVs put into service after December 31, 2023
- Removes the existing 200,000 vehicle cap on credits that made EVs from Tesla, GM, and Toyota ineligible
- Does away with tax credits for expensive EVs
- Eliminates tax credits for vehicles not assembled in North America
- Restricts the full tax credit on new EVs to vehicles with battery minerals sourced from countries that the U.S. has a free trade agreement with
In other EV news, California, the largest EV market in the U.S., enacted legislation that bans sales of new gas-powered passenger vehicles by 2035, basically requiring new vehicles to be electric.
Q2 2022 electric vehicle registrations were up 66% over Q2 2021 and made up 5.6% of all new car sales so EVs are growing and growing fast. As noted in our last blog post, as EV sales increase, so will the number of ways states charge their owners to recoup lost gas tax revenue, and that will make your job titling out of state EV sales harder, but ATC will always know what additional EV fees are required for your out of state transactions.
ATC provides the industry’s most accurate tax, title, and registration fee information to make the car buying experience easier for your shoppers and more profitable for dealers, lenders, and auto technology companies.
The truth is in the data: ATC is the fastest, most accurate TT&L data provider and when you GO ATC, you get the Greatest Of All Titling Companies!
To learn more about how we can help with your EV sales, contact us.