(Credit: Michael H / Getty Images)
The US government changed the EV tax credit process this year, and new data suggests consumers are eager to take advantage of the option.
As of Jan. 1, 2024, buyers can obtain the credit at the dealer, effectively lowering the vehicle's sale price, rather than waiting to get the funds when filing annual taxes. The credit is up to $7,500 for new EVs and $4,000 for used.
The US Treasury says it received 25,000 point-of-sale requests from dealers, 19,500 of which have been for the advanced payments. Most are for new EVs (17,500), though consumers are also taking advantage of the credit for used vehicles (2,000). Dealers have to register with the Treasury to access the funds, and around 11,000 have done so. The US Treasury says it has issued $125 million to registered dealers for the process.
"One month into implementation of this provision, there is strong demand for this new upfront discount, which will continue momentum in growing this industry in the United States," Deputy Treasury Secretary Wally Adeyemo tells Reuters.
Not every EV buyer qualifies for the tax credit, limiting the number of people who can request the credit when buying a car. Making the pool even smaller, this year the US government implemented stricter requirements for vehicles to qualify for the tax credit, which reduced the number that do from 17 to just eight.
Is 25,000 federal tax credits a lot? If we look at 2023 numbers, 1.1 million EVs went into service, or an average of about 92,000 per month. If the same amount sold in January 2024, that would mean about one-fourth of EVs sold got some tax credit funds, though we don't have solid numbers for last month yet.
As more dealers register for the point-of-sale discount process and more EVs qualify for the tax credit, such as the $35,000 Chevrolet Equinox, we can expect to see more people taking advantage of these federal funds.