As electric vehicles gain popularity, federal tax credits are becoming an increasingly appealing incentive. However, not all EVs are eligible for these credits, which means there are several factors to consider before making a purchase. Recent changes to the tax credit rules have made the eligibility list for EVs a constantly evolving landscape.
That tax credits are an effective driver for consumer adoption of EVs. According to the latest regulations, to qualify for the full credit, a car’s MSRP must be under $55,000, while a van, SUV, or truck must be under $80,000. The origin of battery components is a crucial factor to consider. As Consumer Reports explains, the auto industry is vast and sluggish, and manufacturers are grappling with the requirements to make their vehicles eligible for tax credits.
Tax credits EVs and performance car
It’s a complex issue. For instance, while the Tesla Model 3 “Performance” car qualifies for the full $7,500 tax credit, the rear-wheel drive version only receives $3,700 in credit due to its battery components being sourced from China. When it comes to electric cars, Tesla may be the first brand that comes to mind, but there are several more affordable options available in the market.
Consumer Reports highlights the Chevy Bolt as an excellent choice, noting that it is “a very inexpensive vehicle.” With a tax credit, the Bolt can be purchased for just under $20,000, which is a noteworthy price point for any new vehicle, especially an electric one. This price includes destination fees and other associated costs.
As electric cars become more prevalent, they are beginning to make an appearance in the used car market. However, as with any used car, there are inherent risks involved in the purchase. According of Consumer Reports, it’s essential to conduct thorough due diligence before making a decision. However, the process of inspecting an electric car is slightly more challenging than that of a gasoline-powered vehicle, as fewer mechanics are equipped to handle electric cars. This factor may make some buyers uncomfortable during the inspection process.
The primary concern when purchasing a pre-owned EV is the potential need to replace the battery, which can be a significant expense. Typically, the battery is covered for up to 100,000 miles, making it crucial to look for a car with low mileage. However, the cost of replacing the battery varies depending on the model. For example, replacing the battery in a Toyota Prius can cost around $2,700, whereas for some Tesla models, the expense can skyrocket to approximately $20,000.