For those unaware, the U.S. federal electric vehicle tax credit offers up to $7,500 to people who purchase an EV. However, the total credit is dependant on each car's battery size. All fully electric cars on the U.S. market today qualify for the full $7,500 credit due to having batteries that are over 16 kWh. You can compare all EVs' battery size and other specs using our Compare EVs page.
With that being said, after an automaker sells 200,000 plug-in cars, the credit begins to phase out. At this point, only two automakers — Tesla and General Motors — have sold enough plug-in electric cars to have reduced tax credit eligibility. Instead of the potential for a $7,500 incentive, you can only get $1,875 if you purchase a Tesla vehicle or GM plug-in. While Tesla's credit will go away completely after December 31, 2019, GM's is good through the end of March 2020.
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Taxes are something many people don't completely understand. When it comes to details like the U.S. federal EV tax credit, confusion and complications can grow exponentially. We advise you to speak with a tax professional to best understand how the credit works and if your tax situation will allow you to take advantage of the full credit. Just because the credit is available doesn't mean everyone can get it.
Also note that if you do qualify for a credit, you don't get it at the time of sale. Instead, it comes as a credit when you file your taxes. So, buying an EV in Q4 is a wise decision since you won't have to wait long for your tax incentive.
In addition to the fact that not all people have a tax situation that allows them to take advantage of the credit, cars sell for various prices in different areas and during different timeframes. For instance, even though the Chevrolet Bolt is only eligible for a $1,875 federal credit, it qualifies for healthy state and local incentives in some locations. Moreover, some dealerships have sold the Bolt for prices that are significantly less than MSRP. In the meantime, some Hyundai dealerships have charged customers a premium over MSRP for the Kona Electric.
Keep all of the above in mind as you navigate through the following slideshow. As a baseline to make the situation less complicated, we use each vehicle's MSRP before subtracting the maximum available federal EV tax credit. Perhaps you will be able to secure an even better deal when you make your purchase. Lastly, the EV tax credit situation gets messy when it comes to leasing. Since the automaker actually gets the credit, you may or may not benefit.
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