Could You Get $27k off Your First EV Purchase?
Between assembling lithium batteries and researching other new technologies, the cost of building an electric vehicle is still very high. This is why the MSRPs of some EVs are twice that of comparable internal combustion vehicles. Environmentally-conscious California is here to help! But in its usual, overly bureaucratic fashion. Some low-income residents of the Golden State may be eligible for up to $27k in EV-buying assistance. But good luck figuring out which overlapping state and federal grants you’re eligible for.
The federal government offers up to $7,500 towards and EV purchase
The federal electric vehicle tax credit is complicated enough. Until last year, every automaker received a capped number of tax credits they could give EV and PHEV buyers. Therefore, manufacturers such as Tesla and Toyota have long since run out of credits, and the system was beginning to favor startups.
For the 2023 model year, the federal government introduced several significant changes to this rebate. Firstly, there is no manufacturer cap, so Tesla and Toyota are back in the running. But there are stipulations for where the EV is made and even where the lithium for its battery is mined.
There is also an income cap ($150k individual/$225k head of household/$300k filing jointly). In addition, you can now claim the tax credit if you buy a used EV. It must be the vehicle’s first resale, and you can’t exceed a used EV income cap that is half the cap for a new EV buyer. Finally, dealerships can claim the rebate in their own taxes and essentially give you a refund off the MSRP of the vehicle, so you won’t need to wait for tax season to see your money.
You can read more about the 2023 federal EV tax credit.
California also has its own $7,500 tax rebate
Many states are offering their own tax rebates for EV buyers. Not to be outdone, California offers the same amount of tax relief as the federal government. California does not offer this money for hybrid buyers, but it does apply to hydrogen fuel cell vehicles such as the Honda Clarity.
California has the same income cap as the federal government. But in addition, it is trying to help low-income residents buy EVs. It actually offers an additional $2,000 tax rebate to low income Californians buying an EV. For this purpose, California defines low income as 400% of the federal poverty level or less–according to the Sacramento Bee. The program is called California’s Clean Vehicle Rebate.
California offers an additional $12,000 through the Clean Cars 4 All
The Rebate Program is not California’s only EV-buying assistance. The Clean Cars 4 All program offers up to $12,000 for an EV purchase. But how much you qualify for depends on your make and where you live. And in this case, it doesn’t matter what county or city you live in. That’s because the CC4A funds are disbursed based on local air district. The highest CC4A grants are going to Californians who make 225% of the federal poverty level or less.
So there you have it, the web of grants rebates, and point-of-sale rebates that are available for your next EV purchase. You can probably see now why experts in California are urging their state to streamline the application process acros sthese various grants and rebates.
Next, find out the details of getting a tax credit for buying a used EV or learn more about the ins and the outs of the credit in the video below:
