Should you buy an EV? Although Battery Electric Vehicles, Plug-in Hybrids, and Hydrogen Fuel Cell vehicles often have higher price tags than their gas-powered counterparts, buyers who want to go electric are able to take advantage of federal, state-level, and local EV tax incentives that can make the switch much more affordable.
With that said, claiming available EV tax incentives isn’t as simple and straightforward as you might hope or expect. Only select vehicles qualify federal incentives—and the rules were changed right at the beginning of 2023. Although California’s EV tax incentives are a little easier to understand, we don’t want you to leave any part of the leasing or purchasing process up to chance! Our introductory guide can help you move forward with confidence.
Federal EV Tax Incentives: Which Vehicles Qualify?
So, which EVs qualify for the new tax credit offered by the federal government? With up to $7,500 on the line, it’s important to be very clear about the rules impacting buyers and lessees in 2023.
In order to qualify, a vehicle must:
- Be made by an approved manufacturer. At this time, the only approved manufacturers are Audi, BMW, Ford, GM, Nissan, Rivian, Chrysler, Jeep, Tesla, Volkswagen, and Volvo. The IRS keeps an up-to-date list of approved manufacturers.
- Cost less than $80,000 (for Vans, SUVs, and Pickups) or less than $55,000 (for all other vehicles)
- Undergo final assembly in North America. To see if a vehicle was assembled in North America, you can enter its VIN here.
Keep in mind that you can only claim these incentives on your taxes if you purchase the vehicle in question. If you lease instead, the dealership technically continues to own the vehicle. They may choose to pass these savings along to you, but they’re under no obligation to do so.
EV Tax Incentives in California
An up-to-date list of state-level and local EV incentives can be found at Driveclean.ca.gov. Here, we’ve highlighted the most important state-level incentives:
- California Clean Vehicle Rebate Project (CVRP): Qualifying buyers can receive up to $4,500 for the purchase of a Hydrogen Fuel Cell vehicle, up to $2,000 for the purchase of a Battery Electric Vehicle, or up to $1,000 for the purchase of a Plug-in Hybrid.
- All vehicles that use these propulsion systems are eligible for the incentive, and these incentives can generally be combined with other federal and local benefits.
- California Clean Vehicle Rebate Project (CVRP) – Increased Rebate: Buyers with an income of less than four times the federal poverty level are eligible for an additional $2,500 tax incentive.
Get in touch with us today if you’d like information on local EV tax incentives in San Francisco, Irvine, Los Angeles, or anywhere else in the state!
Partner with Cartelligent and Stay Informed
Maximizing your return from federal, state, and local EV tax incentives is no easy task, but we’re here to help! Cartelligent is a car-buying broker service that can help you navigate the entire upgrade process. Can’t make it into one of our locations? We’re just a few clicks or a phone call away, so start a conversation today!