Electric Vehicle & Hybrid Incentives
Federal and state governments offer various incentives for purchasing Electric Vehicles (EVs) and Hybrids. These incentives include tax credits, rebates, and exemptions. These benefits are intended to encourage people to switch to more environmentally friendly vehicles and reduce their carbon footprint. There are a variety of factors that can help determine which incentives you may qualify for.
In addition to the range of state and federal incentives, several states also have utility and private incentives. These incentives are offered by different electric departments and companies in each state and can add extra savings to your purchase.
Incentive Factors
- Individual State
- Manufacturer's Suggested Retail Price (MSRP)
- Final Assembly Location
- Battery Component and/or Critical Minerals Sourcing
- Modified Adjusted Gross Income
Current Incentives
New Plug-in and Fuel Cell Electric Vehicles Purchased in or after 2023.
All-electric, plug-in hybrid, and fuel cell electric vehicles purchased new in 2023 or after may be eligible for a federal income tax credit of up to $7,500. The credit availability will depend on several factors, including the vehicle's MSRP, its final assembly location, battery component and/or critical minerals sourcing, and your modified adjusted gross income (AGI).
Federal Tax Credits for Pre-owned Plug-in Electric and Fuel Cell Vehicles.
Pre-owned all-electric, plug-in hybrid, and fuel cell electric vehicles purchased on or after January 1, 2023, may be eligible for a federal income tax credit. The credit equals 30% percent of the sale price up to a maximum credit of $4,000. The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. Also, you can't apply any excess credit to future tax years.
Federal Tax Credits for New All-Electric and Plug-in Hybrid Vehicles Purchased Before 2023.
All-electric and plug-in hybrid vehicles purchased new from 2010 through 2022 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to power the vehicle.
Clean Vehicle Credits for New All-Electric and Plug-in Hybrid Vehicles Purchased After 2023.
Beginning January 1, 2024, buyers can reduce a clean vehicle's purchase price by their Clean Vehicle Credit by opting to transfer it to the dealer. Before 2024, buyers could only receive the credit after filing their tax returns. Dealers must submit information to the IRS to determine eligibility and credit amount at the point of sale. Without this, buyers can't claim the credit or transfer it.
Electric Vehicle and Hybrid Benefits.
In general, EVs and hybrids are cheaper to operate and maintain than gas-powered cars, making them an attractive option for many consumers. Depending on the make, model, and year of your new EVs or hybrid, you may also qualify for additional incentives based on your state. To learn more about the specific incentives available in your state, click on the relevant state below. We encourage you to take advantage of these incentives and do your part to protect the environment while saving money on your vehicle expenses.
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