(4 October 2023 – United States) Electric vehicle (EV) buyers will gain access to a US$7,500 federal tax credit off the sticker price directly at the dealership from January 2024 instead of waiting until filing their tax return.
New EV or plug-in hybrid buyers that qualify under the Treasury Department’s guidelines can either take US$7,500 off the sticker price of a new EV or US$4,000 off the cost of a used EV under the new guidance.
Multiple EV models are eligible for all or half the new credit while a handful of mostly imported brands are not eligible for now. Most of the eligible EVs so far are made by the “big three” US automakers including Ford, GM and Stellantis plus Tesla and German carmaker VW.
Getting consumer subsidies up front could be an important piece of the puzzle to getting more people to buy EVs according to George Washington University who report that the vast majority of potential EV buyers preferred getting money back up front, rather than having to wait to file their taxes and claim credits later.
“For the first time, the Inflation Reduction Act allows consumers to reduce the up-front cost of a clean vehicle, expanding consumer choices and helping car dealers expand their businesses. The IRS has focused on streamlining this process for car dealers as part of its commitment to improving service and helping taxpayers claim the credits they are eligible for” commented Treasury Chief Implementation Officer for the Inflation Reduction Act, Laurel Blatchford.