USA: $1 billion dollars in incentives paid since January

The US federal government has paid more than $1 billion dollars on cash incentives for electric vehicles since January. Apparently, about 150,000 buyers opted for the advanced payment.

Image: Volvo

Specifically, about 125,000 buyers of new EVs, FCEVs, or PHEVs took advantage of the “new clean vehicle” tax credit as an upfront payment, and about 25,000 buyers of the “previously owned clean vehicle” credit. According to the US Treasury Department and Internal Revenue Service (IRS) that accounts for 90 and 80 per cent of all purchases of EVs that qualified.

There are, of course, electric vehicles that don’t qualify for the tax credit in the first place. Leased vehicles are not eligible either.

“This discount is increasing consumer choices and creating new opportunities for companies to expand their customer base,” said Secretary of the Treasury Janet L. Yellen. “Consumers are saving up front and over time, with $1,750 savings on gas and maintenance each year and $21,000 saved over the lifetime of a vehicle.”

Since the beginning of the year, buyers of new and used electric cars can benefit from the US tax credit right when purchasing the vehicle. Until then, they could only claim the 7,500 tax credit for new EVs or the 4,000 dollar tax credit for used EVs when filing their tax return the following year. Now, they can transfer the credit to a car dealer, effectively reducing the vehicle’s price directly at the time of purchase. 

There are, of course, requirments that buyers need to fulfil. In fact, they are the same as for the previous tax credit. For example, the income cap introduced in August 2022 still applies. Individuals with an annual income of more than $150,000 (or $300,000 for married couples) are not eligible for the tax credit (and the upcoming purchase rebate). If buyers wrongfully claim the rebate, they will have to pay a refund to the government on their next tax return.

Also, dealers do not have to offer the immediate discount. To do so, they must register via a new IRS website. It is not clear how many have done so.,


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