Representative | Image:Pixabay
EV rebate surge: The US government has allocated over $580 million in upfront electric vehicle (EV) tax rebates to auto dealers since the beginning of the year, the Treasury Department revealed on Friday.
Before 2024, American car buyers could only access the new EV credit of up to $7,500 or the $4,000 credit for used EVs when they filed their taxes the following year.
Upfront dealer payments
This year, the Internal Revenue Service has received around 100,000 reports of EV sales at the time of purchase, resulting in more than $580 million in upfront payments to dealers since January 1st, according to the Treasury.
From January 1, consumers have been able to transfer these credits to car dealers during the purchase, effectively reducing the price.
The Treasury reported that over 85,000 of the sales reports were for new EVs, with over 90 per cent of them requesting upfront payments of $7,500. Meanwhile, over 15,000 reports were for used EVs, with about 75 per cent requesting upfront payments of $4,000.
Treasury spokesperson Haris Talwar noted that “demand remains strong four months after the implementation of this new provision.”
EV tax credit changes
In December, the Treasury issued guidelines aimed at reducing dependence on the Chinese EV supply chain. As a result, the number of EV models eligible for US tax credits decreased from 43 to 19 on January 1. However, some models, such as the Volkswagen ID.4 and Nissan Leaf, have since regained eligibility.
To qualify for the tax credit at the time of purchase, consumers must confirm they meet income limits. Failure to do so will result in repayment to the government when filing taxes. For new vehicles, the income limit for married couples is $300,000 and $150,000 for individuals.
The Inflation Reduction Act of August 2022 overhauled the EV tax credit, requiring vehicles to be manufactured in North America to qualify for any credits. This move eliminated nearly 70 per cent of eligible models and introduced income and vehicle price restrictions, as well as extending credits to leased vehicles.
(With Reuters Inputs)
