The recent change to the federal EV incentive program aims to make electric vehicles more accessible to low and middle-income buyers. The clean vehicle tax credit, offering up to $7,500 for new electric, hydrogen, or plug-in hybrid vehicles, and up to $4,000 for used ones, is now available as an instant rebate at approved dealers. This change is expected to significantly benefit buyers who have previously been unable to take advantage of the tax credit due to the upfront costs or insufficient tax liability.
In 2023, consumers purchased over one million electric vehicles in the United States, but the average transaction price for new EVs was considerably higher than that of traditional vehicles. With the recent inflation and rising interest rates, the affordability of EVs has been a concern for many potential buyers. The updated clean vehicle tax credit, part of the Inflation Reduction Act, is available to households making up to $300,000 and applies to vehicles within certain price ranges.
As this change takes effect, the expectation is that more buyers will consider purchasing an electric vehicle. Dealerships, like Tracy Volkswagen, have already registered for the program and anticipate an increase in sales as a result. However, it’s important to note that not all electric vehicle models will qualify for the incentive, as there are specific requirements related to domestic supply chains for EVs. Despite this, the rebate creates new opportunities for buyers, especially when combined with local incentives available in their area.
In addition to the federal tax credit, buyers can also explore other rebates and incentives offered by their state, local government, or utility companies. By taking advantage of these various programs, the cost of purchasing an electric vehicle could be significantly reduced, making it a more feasible option for a wider range of consumers.