UPDATE Possible death of the $7500 Federal EV Tax Credit. To get it, act fast.

The $7500 Federal Tax Credit of EV’s will possibly be abolished 12/31/2017.

UPDATE: The $7500 Federal Tax Credit for EV’s IS SAFE.  There are no changes, it will operate as originally written, with the ramp-down beginning at 200,000 cars per manufacturer, etc.  GM will likely be the first to reach that milestone, given the popularity of the Chevy Bolt EV, and Chevy Volt plug-in hybrid.


EVADC offers this helpful advice to potential plug-in car buyers, in advance of the possible  abolition of the $7500 Federal EV section 30D tax credit.

FAQ:

Is the credit only for new plug-in cars, or used also?

The credit is only available to the first purchaser, i.e. if you buy a new car.  It is not available for used EV’s.  A similar tax credit for motorcycles phased out in 2012.

Do I have to take delivery before 31 Dec 2017?

(No longer pressing, unless you wish to claim the credit for the 2017 tax year)

According to IRS regulations, you only must obtain the vehicle title before 31 Dec 2017. This occurs when you take delivery, so you must take delivery before 12/31/2017.  Ordering a car by 12/31/2017 is not sufficient.

How can I quickly search for plug-in cars near me?

Cars.com, CarsDirect.com, Autotrader.com, Truecar.com are examples of easy ways to get buying advice and local inventory listings.

What is the tax credit for the particular vehicle I’m interested in?

Our famous EVADC Electric Vehicle Information Sheet shows Net Price, which is the MSRP minus the tax credit for that particular vehicle.

Any plug-in car with battery size at least 16 kWh will receive the maximum allowed $7500 credit.  Battery sizes are listed in a column on the information sheet.

The general formula is:   Tax Credit = $2500 + $417 + $417 x ( SIZE – 5)  where SIZE is the kWh battery size of the vehicle.  The credit caps at $7500.  Refer to the EVADC data sheet for battery size data.   Verify the credit with your particular dealer.

So, for example, the 2017 Chevy Volt has a battery size of 18.4 kWh, thus the credit is $2500 + $417 + $417 x (18.4 – 5) = $8504, and it would then be the maximum allowed, $7500.

For a 2017 Prius Prime, the credit would be $2500 + $417 + $417 x (8.8 – 5) = $4502.

What should I buy?  Does EVADC recommend any particular model?

The strength of EVADC is that we are an independent organization of owner/drivers interested in the topic of EV’s, energy, renewables and the environment.   We are not tied with any automaker.  We can, however, recommend general characteristics of EV’s, which can help you when asking questions at a dealer.

If you can only have one vehicle for all trips, you would want a plug-in hybrid, shown in the green section of the EVADC Information Sheet, the exception being for Tesla.  A Tesla Model S or Model 3 can function for all trips, road-trips included, via the Supercharger network.  The Chevy Bolt EV has an EPA range of 238 miles, and thus could also serve as the sole vehicle for many.   If your new car would be a second car, you don’t make long road-trips, and/or you commute around the national average of about 40 miles, then a pure 70-150 mile electric, in addition to a plug-in hybrid would work for you.  You would then make a selection based on the estimate of your needed range due to your commute, driving patterns, features etc.  Be prepared, however, for the plug-in to quickly become the primary car!  If you lease, consider getting more miles than you think you might need.  Also, consider getting DC Fast charging if available, especially for cars with larger batteries, like the Chevy Bolt.  DC Fast charging will give you around 80% range in about 20-30 minutes.  90% of the time, you will likely charge at home, with the balance being either at work or occasional public charging (much of which is free.  See www.plugshare.com to see what charging is near your home, work and shopping).  Tax credits (which are NOT in imminent danger of abolition) are available in DC and MD for charging equipment.  See the EVADC Information Sheet for additional details.

Background Information:

IRS Regulation:    https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

Green Car Reports, Dec 1:    https://www.greencarreports.com/news/1114098_if-you-plan-to-buy-an-electric-car-you-should-do-it-this-month

Electrek, Nov. 2: https://electrek.co/2017/11/02/buying-tesla-electric-cars-federal-tax-credit-gop-tax-bill/

EVADC Statement on EV Tax Credit:  http://evadc.org/2017/11/08/statement-on-proposed-elimination-of-federal-ev-tax-credit/

 

 

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