Getting an EV Tax Credit Is Getting Harder — Can You Still Cash In?
Buyers of all-electric and plug-in hybrid cars purchased new in or after 2010 may be eligible for a federal income tax credit of up to $7,500, according to the Energy Department. However, for electric vehicle companies, there is a 200,000-sold-vehicles cap for which the credit can be applied, and Toyota is the latest carmaker to have crossed it. But there is still a way for fast-acting consumers to get part of the credit.
In June, several CEOs — GM’s Mary Barra, Ford’s Jim Farley, Stellantis’ Carlos Tavares and Toyota North America’s Tetsuo Ogawa — wrote a letter to Congress asking for a lifting of the cap.
“The current program only provides the tax benefit for the first 200,000 customers for each automaker. To provide greater consumer choice, we ask that the per-OEM cap be removed, with a sunset date set for a time when the EV market is more mature,” the automakers said in the letter.
“Eliminating the cap will incentivize consumer adoption of future electrified options and provide much-needed certainty to our customers and domestic workforce.”
Toyota is the latest automaker to have reached the 200,000 cap, joining Tesla and General Motors, according to Reuters. Announcing the crossing of the threshold on its website, Toyota said that it “supports tax incentives to make electric vehicles more affordable. Providing incentives to customers of companies that have led the way on electrification will help accelerate America’s transition to an electric future.”
The 200,000 cap applies to the entire automaker, not each of its separate brands, hence affecting both Toyota and its Lexus luxury brand, according to Kelley Blue Book.
Kelley Blue Book reports that if you act fast, you could still be able to get the credit, as it sunsets gradually over a year.
“There is a brief window when buyers can still get the full $7,500 discount. Toyota publicly announced that it crossed the 200,000-car threshold, but the IRS still needs to certify that it agrees. That hasn’t happened yet, though it could come as soon as next week. Then, the credit halves for six months. Buyers still qualify for a $3,750 discount at that point. Six months after the IRS finding, it halves again, to $1,875. It then hangs on for another six months before ending 18 months from the date of the IRS decision,” according to Kelley Blue Book.
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