Automotive dealers and electric vehicles, it’s not quite the match made in heaven. If 2023 was anything to go by, the schism was glaring—a year marked by staunch dealer rebellion against EVs. The resistance came in several ways, one of which was a letter signed by almost 4,000 dealerships to President Biden demanding to “slow down” the regulations favoring EV manufacturing and sales. Another one involved blatant lies to customers about the capabilities of EVs to coerce them into buying gas cars instead.

But 2024 could open a new chapter for American dealers, and allow them an opportunity to come clean. Fresh news out of Washington D.C. indicates that dealers might be willing to embrace EVs (or at least make a genuine attempt.) More than 7,000 American car dealers have registered with the IRS to provide tax credits to customers at the point of sale, the U.S. Department of Treasury said on Friday. 

This means that EV buyers will get a discount of up to $7,500 right when they purchase the car at the dealership, without having to wait until tax season to file for a rebate. 

Get Fully Charged

U.S. car dealers signal support for updated tax credit provisions.

American car dealers were unwilling to sell EVs. But new IRS guidance, effective January 1, 2024, allows buyers to redeem tax credits right when they buy an EV. Thousands of dealers, surprisingly, support this provision.

The number of dealers who registered to offer point-of-sale credits to customers could be higher than 7,000, as per the National Automobile Dealers Association (NADA). “There are many more dealerships that are covered by those 7,000 registrations, and this does not include the many registration applications submitted but the IRS has not yet approved,” a NADA spokesperson told Automotive News. NADA's 2023 data showed 17,000 franchised dealerships in the U.S.

So far, buyers had to wait until after filing their tax return to claim the federal clean vehicle credit. This meant they would receive the credit several months after purchase. New guidance under the Inflation Reduction Act expedites this process. From January 1, 2024, buyers can drive home an EV by paying a reduced amount upfront, eliminating the need to wait to get their money back. (That’s theoretical, and we need to wait and see how it pans out in the real world.)

Hyundai Ioniq 5 and Ioniq 6 at Tesla Supercharger station in San Clemente, California

The year-long skullduggery, and downplaying of the vitality of EVs, was rooted in some genuine concerns. Investing in charging infrastructure and educating sales personnel requires significant financial commitment. Not to mention the lower sales commissions and after-sales profits. As EVs have fewer moving parts, they require less maintenance. No oil changes, and no need to replace spark plugs or fuel injectors. Despite these valid concerns, the signs are clear: Scientific consensus on the effects of global warming calls for an incontrovertible EV adoption, which many American dealers vehemently opposed.

The claim that “enthusiasm [for EVs] has stalled” was a highlight in the letter to Biden. But the new IRS guidance could be a morale booster for dealers. They now have a foolproof reason to attract customers. It could help them clear their piling EV inventories, make space for new batches, and in turn, spur manufacturing, which has taken a backseat for some carmakers. It’s a red carpet to take EVs seriously, end the cattiness, and give EPA’s emissions targets due consideration.

For now, any positive outcome is a speculation, of course. And one sweeping red wave in next year’s election could thwart years of progress. But if the formula works, all the fossil fuel-championing Republican nominees (and their eventual presidential candidate) will have one of the biggest reasons to hurl vitriol toward EVs snatched out of their books.

Got a tip for us? Email: