Is Colorado ‘The Best Place In The Country’ To Buy An EV?

A viral TikTok recently declared Colorado “the best place in the country” to buy an EV. That’s a bold claim. But is it true? A closer look at the state’s tax credits, exchange programs and market share suggests it just might be.

There’s plenty of attention on incentive packages for EVs since the well-publicized $7,500 federal credit for many models is set to expire on Sept. 30. But creator and transit expert Danny Katz (@danny.katz) lays out the details of several options for Colorado residents to cut their purchase price on EVs outside of the soon-to-be-gone federal incentive.

“There is a $7,500 federal tax credit for new electric vehicles that expires on Sept. 30, but that's not the only tax credit that's available or incentive that's available,” Katz explains before introducing Will Toor, executive director of the Colorado Energy Office, who lists some of the state’s EV incentives.

How Colorado’s Incentives Stack Up

Here are the significant incentives in play right now for Coloradans shopping for an EV and how they compare in total savings:

• Federal EV Tax Credit: Up to $7,500 for new electric or plug-in hybrid vehicles. Delivery must be completed by Sept. 30, 2025, to qualify. Used EVs are eligible for up to $4,000 under federal rules.
• Colorado State Innovative Motor Vehicle Credit: For 2025, the base credit is $3,500 for new EVs or plug-in hybrid EVs (PHEVs) with an MSRP up to $80,000, and there is an additional $2,500 for vehicles with an MSRP under $35,000. That brings the state credit potential to $6,000 in the right cases.
• Vehicle Exchange Colorado Program: This program is aimed at income-qualified buyers who trade in older, high-emitting gasoline or diesel vehicles. The rebate can be up to $6,000 for new battery EVs/PHEVs or $4,000 for used ones. Requirements include income thresholds, vehicle age or emissions failure and caps on vehicle MSRP or purchase price.

Put together, a buyer in the right circumstances might combine all three programs to reduce the cost of a qualifying new EV by $17,000 or more.

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To justify calling Colorado “the best place” to buy an EV, it helps to look at how deeply EVs have penetrated the auto market there:

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• In Q3 2024, Colorado briefly overtook California in terms of the percentage of new cars sold that were electric. In that quarter, about 25.3% of new vehicles purchased or leased in Colorado were EVs, compared to 24.3% in California.
• However, that dominance hasn’t held steady. In early 2025, the share of new EV registrations in Colorado dropped to about 15.9% from 21.5% in Q4 2024.
• Still, that kind of year-over-year growth is remarkable. Just a few years ago, EVs made up only a small fraction of new car sales in the state. In 2019, only about 2.2% of new vehicles sold in Colorado were EVs.

The savings potential in Colorado varies widely depending on the buyer. After Sept. 30, typical buyers purchasing a higher-priced EV without the trade-in benefit would still see around $11,000 in combined incentives.

How Colorado Stacks Up To Other States’ EV Incentive Packages

While Colorado’s incentives are among the strongest in the country, several other states are also offering substantial rebates, credits or bonuses, albeit with more stringent limitations. Comparing them helps clarify the extent of Colorado's advantage and in what areas it leads or lags.

California remains one of the most ambitious states. Its Clean Vehicle Rebate Project offers up to $7,500 for qualifying battery EVs and fuel-cell EVs, with somewhat smaller rebates for PHEVs. Income qualifications apply, with lower-income households eligible for larger rebates. There are also grants for low-income purchasers to help with vehicle costs. Utility- and municipal-level programs sometimes offer bonuses for activities such as replacing old gas cars or installing home chargers.

Connecticut has a tiered rebate program (known as Connecticut's Hydrogen and Electric Automobile Purchase Rebate) that scales with vehicle type and income. As of mid-2025, standard rebates are relatively modest, but income-qualified buyers can receive significantly more. Starting in August, Connecticut cut its standard rebate for new EVs from $1,500 to $500, although the “Rebate+” program for lower-income households remains higher.

Oregon offers a meaningful option for income-qualified buyers through its Charge Ahead Rebate, which provides up to $7,500 for new EVs and up to $5,000 for used ones. That program remains funded and is open to low- and moderate-income households as well as certain nonprofits. The state’s broader Standard Rebate, which offered up to $2,500 for new EV purchases regardless of income, was suspended as of Sept. 9 after funds were depleted.

New Jersey offers rebates or tax incentives up to about $4,000 for eligible battery EVs, and in many cases offers sales tax exemptions on qualifying EVs, which can significantly reduce purchase price. While these incentives are strong, they often place stricter MSRP caps or mileage/vehicle type limits than those in Colorado.

Colorado’s state EV incentives won’t stay this generous for long. In 2025, buyers can claim up to $3,500 in state credits, plus a $2,500 bonus for vehicles with a lower MSRP. But under the current law, those amounts will shrink dramatically in 2026. Because state revenue growth was projected at less than 4%, a budget trigger was activated that cuts many green tax credits in half.

As a result, the base EV credit is expected to fall to around $750 next year, though the $2,500 bonus for cars under $35,000 is slated to remain. That means buyers who wait until 2026 will miss out on thousands in savings compared to today’s deals.

InsideEVs reached out to Katz via direct message.

 

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