From CNBC: 2024-06-12 05:00:01

The federal government has issued over $1 billion in upfront cash incentives to buyers of electric vehicles, offering tax credits worth up to $7,500 for new EVs and $4,000 for used EVs at the point of sale. This provision kicked in on Jan. 1, allowing consumers to get the credit upfront regardless of their federal tax liability.

The tax credits aim to help EVs compete on price, making them more affordable compared to traditional vehicles. The average purchase price for electric cars in April 2024 was $55,242, versus $44,989 for traditional cars. Prices are dropping, with new EV prices declining by 9% in the first quarter of 2024.

Since the beginning of the year, about 125,000 consumers have opted for upfront payment for new EV tax credits, accounting for 90% of qualifying transactions. Additionally, 25,000 buyers have chosen upfront payment for used EV tax credits, representing 80% of qualifying transactions. Senate Republicans introduced a measure in May to end federal tax credits for electric vehicles.

There are limitations on EV tax credit availability based on income and EV sticker price. Single and married taxpayers are ineligible for a tax break for new EVs if their annual income exceeds $150,000 and $300,000, respectively. The income limits are lower for used EVs. SUVs and smaller cars qualify only if their sticker prices are below $80,000 and $55,000, respectively.

Read more: $1 billion in EV tax credits issued upfront to buyers, say Treasury, IRS