Incentives to Help Lower Price of New and Used Electric Vehicles
With the recently passed Inflation Reduction Act (IRA), more households can lower their energy costs and help combat climate change. New incentives will be available over the next decade to help you choose cleaner and healthier electric home appliances, switch to electric vehicles, and add solar and battery storage to your home.
We will be doing a series of blog posts to share the incentives available from the IRA as they become available.
The new IRA legislation includes incentives to drive down the purchase price of electric vehicles (EVs) that are manufactured in North America. Drivers who buy a new EV can get up to $7,500 in tax credits and in 2023, for the first time, up to $4,000 for a used EV.
Starting in 2023, the tax credits for new EVs are only available to those who make less than $150,000 for single filers or $300,000 for joint filers. Also, the EV must cost less than $55,000 for a car or $80,000 for a SUV, van, or truck. The tax credit for used EVs are available for those who make less than $75,000 for single filers or $150,000 for joint filers.
|2023 EV Federal Tax Rebate||Qualification||Tax Credit|
|New electric vehicle|
• Car must cost less than $55,000
• SUV, van, or truck must cost less than $80,000
|Income must be less than:|
• $150,000 for single filers
• $300,000 for joint filers
|Up to $7,500|
|Used electric vehicle||Income must be less than:|
• $75,000 for single filers
• $150,000 for joint filers
|Up to $4,000|
The IRS has information on how to qualify for the tax credit. In 2023, tax credits are available once again for popular models like the Chevy Bolt (making the price under $20,000) and Tesla models 3 and Y. However, starting around March 2023, the tax credit will depend on how much of the vehicle was made in North America. The U.S. Department of Energy has a VIN tool to check eligibility of specific models.
These incentives can be combined with other rebates for maximum savings. Our EV webpage has more information on all the current rebates available.
EV drivers continue to save over the lifetime of the vehicle with lower fuel and maintenance costs than gas-powered vehicles. It costs only $2/gallon to charge an EV compared to paying close to $6/gallon at the pump.
Rewiring America has put together a tool to find out how much money you can get from each IRA incentive. The tool can combine incentives to calculate your future savings.
In addition to making things more affordable for families, the IRA also provides tax incentives for entities like SJCE so that investing in wind, solar, and energy storage becomes even more cost-effective. As residents electrify at home and on the road and SJCE builds more renewable resources, we’ll make great strides in achieving a cleaner and healthier future together.