2023 Incentives for Electric Vehicles
The new year brings many things, like a fresh start, resolutions to make positive changes in your life, and, this year, revamped incentives for buying electric vehicles (EVs). Incentives for EVs are commonly tax credits that benefit individuals who purchase an EV by reducing the taxes they owe.
For a long time, the Federal Tax Credit offered a $7,500 tax credit to individuals who purchased a new EV. However, there were limits for the number of tax credits that could be claimed for vehicles made by each manufacturer, with Tesla and GM both exceeding the 200,000 vehicle threshold.
Now known as the Clean Vehicle Credit, the requirements and eligibility for federal EV incentives were updated on the IRS Manufacturer and Models page, altering the consumers and vehicles that are eligible for the credit and how much they can receive. In this article, we’ll highlight the 2023 incentives that are available if you purchase an electric vehicle.
What Incentives Are Available to EV Buyers in 2023?
The Inflation Reduction Act of 2022 changed the rules of the incentives available to consumers when buying an EV between 2023 and 2032. These updates have caused some confusion, with many people wondering who is eligible, which vehicles qualify, and how much they can get in incentives. Let’s look at some of the most important information for potential EV buyers to know.
The Clean Vehicle Credit still offers consumers a credit up to $7,500 when they buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV).
In order to qualify for the updated tax credit, you’ll need to meet these requirements:
- Purchase the vehicle for personal use, not resale
- Use the vehicle primarily in the United States
- Your modified adjusted gross income (AGI) can’t exceed $300,000 for married couples filing jointly, $225,000 for heads of households, or $150,000 for all other filers
Some of the biggest updates under the Inflation Reduction Act involve the vehicles that qualify for the tax credit. Now, the vehicles you purchase must meet the following criteria:
- Must be a new EV
- Be made by a qualified manufacturer
- Have a manufacturer suggested retail price (MSRP) of or under $80,000 for vans, sport utility vehicles (SUVs), and pickup trucks, or $55,000 for other vehicles
- Undergo final assembly in North America
- Have a battery capacity of at least 7 kilowatt hours
- Have a gross vehicle weight rating of less than 14,000 pounds
You can check online to see if a specific vehicle meets the requirements for final assembly location using the Department of Energy’s VIN decoder.
This is a federal tax credit that applies to anyone in the United States. However, there are also local and state incentives for buying an EV that vary depending on location. For instance, the Clean Vehicle Rebate Project allows Californians who have purchased an EV to apply for a separate rebate of up to $7,500. You can use this savings calculator to find out what incentive programs you are eligible for and get an estimate of your potential savings.
At Ride and Drive Clean, we believe EVs are vital to a cleaner future, whether they are for driving, towing, outdoor needs, powering your house when you lose power, driving in the cold, or going on a road trip. We host regular events to keep you informed of the latest vehicles, innovations, and financial incentives, as well as offering an EV Buying and Driving Guide.
Our EV Discount Campaign runs twice a year, providing limited-time savings events with discounted pricing on a variety of new battery electric and plug-in hybrid vehicles. Sign up now to get notified when we announce this year’s EV Discount vehicles!