There are many benefits to driving an electric vehicle (EV). One particularly compelling benefit is the potential for tax credits or other financial incentives from a wide array of sources, from the federal government to your local city council. Some electric utilities and large companies also offer benefits for buying a new EV or installing a home charging station. Here’s how to hunt down all the incentives for which you qualify when you buy a new EV.
The United States government offers a federal tax credit worth up to $7,500 for individuals buying a new electric vehicle. Under the current rules, Tesla and General Motors no longer qualify for federal tax benefits; Lexus and Toyota will get their maximum credit cut in half—to $3,750—in September 2022. You can see the credit amount for each new plug-in vehicle sold in the U.S. qualifies at the Department of Energy’s (DOE’s) fueleconomy.gov website.
For now, the federal EV incentive is a tax credit. To get the full $7,500 credit, you must owe at least that amount in federal taxes during the year in which you buy the car. When filing your taxes the following year, complete Form 8936 to claim the credit and reduce your tax obligation.
Recent legislation expected to become law soon will extend the federal credit for all brands through 2032. The proposed law will also add income caps for buyers and upper price limits on qualifying vehicles. It would also extend federal incentives for buying used EVs for the first time.
Finding state and local EV incentives will require some research. An excellent place to start is the Internet. State government websites should provide detailed information about any EV incentives available to you.
Not all state and local incentives are strictly financial. Some may allow access to high-occupancy vehicle lanes that require two or three people in a car equipped with a gasoline engine. Some might offer free or reduced-rate parking for EVs. Also, some insurance companies have lower rates for EVs.
To start your search for state and local incentives, check out the DOE’s comprehensive state-by-state list of alternative-fuel vehicle incentives, including for EVs. Plug In America is an independent EV advocacy organization with a list of state incentives. Some companies provide their own lists, like this one from Enel X Way.
Utilities across the country incentivize customers to install a home charging unit or buy an EV. Your utility may announce the availability of an EV or charging station rebate in its print or email newsletter. Performing a search on your utility’s website or calling/emailing customer service should provide any information about incentives offered by the company.
Some companies offer EV incentives to their employees. These benefits may include purchase rebates or the availability of workplace charging. Ask your human resources department if there are any EV benefits available. If there are no EV charging options where you work, ChargePoint offers these six tips to introduce it.
National Drive Electric Week takes place each fall in the U.S., offering EV drivers and those curious about electric cars the chance to get together and share information in a friendly setting. You can find a local event here.
You don’t have to wait until September, though. Historically, many EV drivers are happy to reward your curiosity about their cars if you ask them when you see them in public. They may have been through the incentive process recently and can provide you with up-to-date, local information.
Some EV dealers will provide details on local incentives when you buy your new car. The salesperson should also inform you of any incentives from the automaker, which could include a limited amount of free public charging or a rebate to install a home charger. If the salesperson doesn’t mention these incentives, make sure to ask. The dealership might also have an EV specialist who can provide authoritative information about your local area.
You can find incentives to buy and use electric vehicles from many sources. Finding the incentives for which you are eligible might take some time, but each benefit you get further lowers your overall cost of switching to electric drive. You can learn more about new EVs in the Shopping Guides section of our website.
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