Treasury Reports $135 Million in Advance EV Tax Rebates Issued by U.S. Since January 1

The U.S. government has taken an important step in advancing the electric vehicle market by reimbursing auto dealers for approximately $135 million in advance point-of-sale consumer electric vehicle tax credit payments since the beginning of the year through Feb. 6, according to the Treasury Department. This initiative has been put into effect to provide consumers with the opportunity to transfer electric vehicle tax credits to a car dealer at the time of purchase, effectively reducing the vehicle’s purchase price.

The Internal Revenue Service has reported more than 25,000 time of sale reports, with over 19,500 requests for advance payments. As a result, approximately $135 million has already been paid to dealers since Jan. 1, indicating strong consumer demand for this new upfront discount.

Furthermore, the advance payment requests include 17,500 for new EVs and 2,000 for used vehicles. Surprisingly, over 11,000 U.S. auto dealers have registered for the program, with more than 8,000 registered for advance payments, clearly illustrating the significant interest in this new tax credit initiative.

It’s important to note, however, that due to new battery sourcing rules, several electric vehicle models, including the Nissan Leaf, Tesla Model 3s, Chevrolet Blazer EV, Cadillac Lyriq, Ford Mach-E, and Ford E-Transit, have lost eligibility for tax credits as of January. Nonetheless, Volkswagen has regained eligibility for versions of its ID.4 EV.

To qualify for the tax credit at the time of purchase, consumers must attest that they meet income limits or risk having to repay the government when filing their taxes. The adjusted gross income limit is $300,000 for married couples and $150,000 for individuals when purchasing new vehicles.

The Inflation Reduction Act of August 2022 reformed the EV tax credit, imposing several new requirements, including the assembly of vehicles in North America to qualify for tax credits, lifting manufacturer caps on credits, and extending credits to leased vehicles. This legislative move has helped shape the current landscape of electric vehicle tax credits and has had a significant impact on the number of eligible models.

In conclusion, these new developments in the electric vehicle tax credit program are expected to continue the momentum in growing the electric vehicle industry in the United States. It is a vital step in incentivizing consumer adoption of electric vehicles and promoting innovation in the automotive market.