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.


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/



Statement on Proposed Elimination of Federal EV Tax Credit

GOP Tax Plan Outsources EV Innovation to China

Quoting President Trump, “Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.” Congress should remember these words while framing the current tax bill, which would repeal a small but vital provision, the Section 30D Plug-In Electric Drive Motor Vehicle Credit. Simply put, America is in a race with Europe and Asia, particularly China, to introduce the next generation of advanced cars and trucks. Tens of thousands of jobs are at stake in assembly lines, advanced battery plants, parts production, infrastructure development and exporting around the globe. As of Nov.1, 721,729 early adopters have purchased plug-in vehicles with the aid of this tax credit, helping to bring down the prices of these limited-production vehicles, which are inherently more expensive to produce in small numbers. Until we reach critical mass, i.e. assembly lines producing hundreds of thousands and eventually millions of PEVs each year, Section 30D will remain vital to America’s interests. How so?

In 2016 alone, according to the Energy Information Administration, we imported 28% of the petroleum we consumed from outside North America. Electric vehicles are a means to reduce the torrent of oil payments leaving the country. We also don’t spend huge sums protecting supplies of electricity, and we don’t make expedient concessions which put our values on a second-tier in order to develop those supplies. As former CIA Director James Woolsey put it, “We aren’t addicted to oil, but our cars are.”

Without EV’s, American’s will remained hooked on gasoline, subject to prices ready to pop whenever a hurricane takes large amounts of refining offline, or a crisis develops in a distant sea lane. EV drivers soon become aware of how cheap EV’s are. Usually, 90% of the time they charge in the garage. The cost in electricity to travel from A to B is about 3 cents/mile. Compare this to the cost in a typical 30 mpg gas car: 12 cents/mile. One major advantage of EV’s is the cold hard cash they save – it’s a cost equivalent to about $1/gallon. Given the opportunity, most people would jump at the chance to drive at that price.

When sales from a particular automaker reaches 200,000 vehicles, the credit amount begins a ramp down to zero. Right now, it appears GM will be the first to reach that milestone. How did GM achieve that goal? By investing in technology and battery R&D, knowing with the certainty that all businesses crave that the credit would be waiting for the buyers of their vehicles. By changing the rules midstream just as technology investments are beginning to pay dividends, this tax bill will upend the investment decisions of automakers and the purchasing decisions of American car buyers. Tesla’s new affordable sedan will put it over the 200,000 finish line as well. Why would the US Congress want to make business more difficult for a home grown American company making an American product in American factories using American workers getting paid an American wage? Recall the words of the President.

There is no time to waste. Already every major auto manufacturer is developing PEVs, and currently China, with the aid of government incentives, is the global leader in PEV sales. We cannot slip backward if we are to compete on a global level. It would be a shame if Americans end up purchasing imported Chinese, Japanese and EU-built electric vehicles because America failed to compete. Simple amputation of this tax credit would be both an unnecessary and damaging self-inflicted wound.

What should happen going forward is to let the credit work as designed, as an incentive for automakers to make EV’s and establish the early market for them. Once the 200,000 ceiling is hit, let the credit phase out, and accomplish its purpose with the addition of 200,000 EV’s per automaker to the nation’s roads, enabling the country to take full advantage of all that EV’s have to offer. Reduced oil consumption. Cost savings for families. Cleaner air from fewer tailpipes. Developing a product whose global demand will rise for decades. The EV tax credit seeds our transportation fleet with cars that offer all of these national benefits and opportunities. It’s an investment already paying off through a chain of owners and over the decades-long lifetime of cars.