U.S. has issued $580 million in electric vehicle (EV) point-of-sale tax rebates in 2021.

WASHINGTON — The U.S. government has been making significant progress in reimbursing auto dealers for advance point-of-sale consumer electric vehicle (EV) tax credit payments. Since January 1st, over $580 million has already been distributed by the Treasury to support the adoption of electric vehicles.

Before 2024, American consumers could only benefit from the $7,500 new EV credit or the $4,000 used EV credit when they filed their taxes the following year. However, with the recent changes, buyers can now access these credits directly at the time of purchase, effectively reducing the cost of acquiring an electric vehicle.

It’s worth noting that the Internal Revenue Service has processed approximately 100,000 time-of-sale EV reports this year alone. This has allowed for efficient payments to be made to dealers, further incentivizing the transition to electric vehicles.

According to Treasury spokesperson Haris Talwar, there has been a strong demand for the new provision, indicating a positive reception towards the enhanced EV tax credit system.

Furthermore, the recent guidelines issued by the Treasury aim to promote the localization of the EV supply chain, reducing reliance on imports from China. This has impacted the eligibility of certain EV models for tax credits, with the number of qualifying vehicles decreasing to 19 from 43 as of January 1st.

Despite these changes, some popular models like the Volkswagen ID.4, Nissan Leaf, Chevy Blazer EV, and Cadillac Lyriq are once again eligible for tax credits, encouraging more consumers to explore electric vehicle options.

Consumers interested in claiming these tax credits must adhere to income limits set by the government. Failure to meet these criteria may require repayments when filing taxes. The adjusted gross income limit currently stands at $300,000 for married couples and $150,000 for individuals purchasing new electric vehicles.

Recent legislative changes, such as the August 2022 Inflation Reduction Act, have introduced reforms to the EV tax credit system. These reforms emphasize the assembly of vehicles in North America for eligibility, introduce a used EV tax credit, lift manufacturer caps on credits, impose income and vehicle price restrictions, and extend credits to leased vehicles.