Incentives and Costs
Expand each section to see amounts for different households.
Tax Credit (New EV)
Save up to $7,500
For new EVs with max cost of $80,000
Starting in 2024, the EV tax credit will essentially convert into a point-of-sale rebate.
The $7,500 new EV tax credit applies to electric vehicles with a maximum MSRP of $55,000 and vans, SUVs, and pickup trucks with a maximum MSRP of $80,000. Starting in 2023, the credit will also be subject to geographic manufacturing requirements that may initially limit the list of eligible models. And starting in 2024, these tax credits will be transferable to dealers, essentially converting into an upfront discount.
See here for eligible vehicles.
The new EV tax credit is also income-limited:
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
Tax Credit (Used EV)
Save up to $4,000
For used EVs with max cost of $25,000
Starting in 2024, the EV tax credit will essentially convert into a point-of-sale rebate.
The tax credit applies to 30 percent of the cost of a used EV, up to $4,000, on a vehicle with a maximum MSRP of $25,000, weighing no more than 14,000 lbs.
The used EV tax credit is also income-limited:
- $150,000 for married filing jointly or a surviving spouse
- $112,500 for heads of households
- $75,000 for all other filers
All the details
Expand each section to learn more
How does it work?
Electric vehicles are either partially or fully powered by electricity. Fully electric vehicles (EVs) have a battery instead of a gasoline tank, and an electric motor instead of an internal combustion engine. Plug-in hybrid electric vehicles (PHEVs) are a combination of gasoline and electric vehicles, so they have a battery, an electric motor, a gasoline tank, and an internal combustion engine.
Most EVs on the market today have a range of more than 200 miles on a single charge, which means most people can satisfy all of their daily driving needs by charging their EV overnight at home. To charge the vehicle quickly, you may want to install a dedicated “Level 2” charging system. If you live in an apartment or condo complex, your building may offer charging services, and if you live in a city there could soon be a charger on every utility pole in your neighborhood. You may also be able to plug in at your workplace, or at one of the growing numbers of public charging stations.
How will it save me money?
Electric vehicles are much cheaper to operate than gas-powered vehicles. As gas prices get higher and more volatile, electric cars are now three to six times cheaper to drive than gas vehicles, which translates to hundreds of dollars a year in savings. EVs also typically cost half as much to maintain because they have fewer moving parts and don’t require oil changes.
Why is it better for the environment?
EVs produce no tailpipe emissions! And when paired with clean electricity sources like rooftop or community solar, electric vehicles don’t produce any emissions while charging. Even without clean electricity, EVs are more climate friendly than gas vehicles because they are so much more efficient.
Other benefits?
Electric vehicles have tons of other benefits. EVs have better acceleration than comparable gas-powered vehicles, so they’re more fun to drive. They’re also quieter, and don’t pollute our neighborhood’s streets and air. And as more utilities roll out “time-of-use” rates and demand-response programs, EVs will enable customers to save even more money.
