USA: Tax credit is now available for second-hand EVs
In the US, used electric vehicles are now also eligible for tax credits. BEVs, PHEVs or FCEVs that are at least two years old can qualify for up to 4,000 dollars in incentives. However, only under certain conditions.
The US Environmental Protection Agency (EPA) just now announced expanding the US EV subsidy programme to include second-hand vehicles, but the measure applies retroactively for vehicles purchased after 1 January 2023. The last time these rules were adjusted was in April 2023 as part of the Inflation Reduction Act (IRA). The maximum tax incentive for new cars is currently 7,500 dollars.
So now buyers can also get a tax credit for used cars of up to 30 per cent of the vehicle’s value and a maximum of $4,000. A list of eligible models is available online.
However, the vehicles must meet certain requirements. The used car must not cost less than 25,000 dollars and must be at least two years old. It must be purchased through a dealer and have a battery with at least 7 kWh on board (this applies especially to plug-in hybrids). In addition, certain upper-income limits for applicants apply. Another prerequisite is that a previous owner has not yet claimed the tax credit for the used electric vehicle. Those who receive the bonus are also not entitled to another one for at least three years. The buyer must also intend to use the vehicle primarily in the US.
Interestingly, foreign carmakers also qualify for the used car tax credit. In contrast to the incentive for new EVs, the battery material origin does not play a role. Since the tax credit reform in April, electric and plug-in hybrid models from manufacturers such as Nissan, Hyundai and Volvo Cars no longer qualify for subsidies. With its ID.4, Volkswagen is one of the few foreign manufacturers to make the new list of electric models that qualify for the full $7,500 tax credit in the United States. BMW is only represented with one plug-in hybrid (X5 xDrive50e).
As things stand, only new BEV and PHEV models from Cadillac, Chevrolet, Chrysler, Ford, Jeep, Lincoln, Rivian and Tesla are otherwise eligible for the tax credits.