There are ample reasons to consider an all-electric vehicle as your next daily driver. Each year, electric cars become more refined, offering the performance, safety, and range you might expect from a gas-powered vehicle. There's another perk to buying an electric car too: the tax credit. If you've been searching for electric cars around Amarillo, Lubbock, and Midland, TX, you might have heard about this tax deduction. But how does the electric car tax credit work?
Our Audi Lubbock team is answering that question in this overview!
Understanding the Basics: Electric Car Tax Credit
The electric car tax credit is an incentive put in place by the federal government to encourage the use of alternative-energy vehicles. A new electric vehicle (EV), plug-in hybrid (PHEV), or fuel cell vehicle is going to be eligible for this tax credit.
At most, the tax credit can reach $7,500. There are a lot of factors at play here, however. Over time, certain brands are no longer eligible for this electric car tax credit. So, let's jump into specific questions about how the tax credit functions.
Are All-Electric Cars Available for the Tax Credit?
Not every electric car is still eligible for this federal tax credit. There are stipulations to the tax that must be adhered to.
First, you have to purchase a new car. So, buying a used EV model means you won't have access to the tax credit. Secondly, you have to buy the car as opposed to leasing it.Â
Lastly, manufacturers will lose out on the chance to offer this tax credit bonus once they surpass 200,000 sales of EV, hydrogen cell, or PHEV vehicles. To this point, the tax credit is no longer offered by Tesla or any GM product, for example.
How Do I Receive the Full $7,500 Tax Credit?
Hydrogen cell vehicles and fully electric cars from eligible manufacturers will come with the $7,500 electric car tax credit. If you're looking at a PHEV model, you may see less than the $7,500 tax credit. It all depends on battery size.
PHEV models use a mixture of a gas-powered engine and an electric battery to create an efficient powertrain. The size of the battery is the determining factor in how much of the tax credit you're going to receive. So, it's important to understand the size of your car's battery when car shopping.
Be Aware of Nearby Incentives
The federal tax incentives can also be coupled with local state or city incentives. So, if you're just starting the car-shopping process and an EV or PHEV model is on your list, be sure to check out nearby incentives and dealership specials.
The Electric Car Tax Credit Is Meant to Benefit You
At the end of the day, moving to an electric car makes sense for many around Midland, Amarillo, and Lubbock, Texas. You can find these types of cars at our Audi Lubbock dealership. You can direct any questions about the federal tax incentive to our staff, too!
