Whether it’s for the thrill of instant acceleration, the wallet-smarts of low maintenance costs, or the desire to drive with minimal impact on the planet, drivers all over the US are leading the charge to electric vehicles (EV). In fact, no vehicle segment is growing more quickly than EVs.
However, quick growth can sometimes mean larger price tags. Traditional gas vehicles tend to be less expensive than EVs simply because they’ve been around for so long, but EVs are quickly achieving price parity, especially with available incentives. The average cost of a new car in the U.S. in June 2019 was $36,600 —a 2% increase from 2018. During the same time period, the average cost of an EV decreased from $64,300 to $55,600: a 13.4% decrease from the year before.
Although traditionally more expensive than their fossil-fuel-burning counterparts, EVs are increasingly becoming more affordable with government rebates, tax credits, and incentives making the prices even more competitive.
In the U.S., the federal government, state governments, city governments, counties, and even local utilities and community choice aggregators (CCA's) offer incentives to encourage people to switch to elective vehicles. Exactly which rebates apply to you are very particular to where you live, which EV you purchased, and your income level.
Federal tax rebate
Depending on where you live and your tax situation, every taxpayer in the U.S. is eligible for a tax credit of up to $7,500 from the federal government for each EV purchased. It can’t be used to generate a large tax refund for you, so you must have $7,500 of tax liabilities to offset.
State, county, and city incentives
State incentives vary by state, county, and city. For instance, California’s Clean Vehicle Rebate Project (CVRP) is worth up to $2,500. PHEVs are typically awarded a $1,500 rebate and only applies to those who report less than $150k if filing taxes as single or $300k if filing taxes jointly. Plug In America has an interactive U.S. map that shows current plug-in car incentives in each state. Additionally, the U.S. Department of Energy has an interactive chart of state incentives worth exploring.
When it comes to electric vehicles, approximately 80% are leased, with the exception of Tesla because they don’t report lease data. Why is that number so high? Leasing vs buying an EV has its advantages, like:
In short, with the ever-changing technology, rebates, and incentives associated with EVs, leasing can be a very attractive option for many buyers.
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