May 24, 2024

Stacking Incentives To Make The Most Out Of Your EV Purchase

If you’re considering an electric vehicle (EV) purchase or lease, now is a great time to make the jump. Car companies are ramping up production, bolstering their manufacturing and supply chains and churning out a wide range of EVs. As a result, there are double the amount of EVs at dealerships compared to gas cars today — meaning ample opportunities to take a test drive, avoid long waitlists, and lock in your upgrade to electric.

Just as important, the market incentives are piling up. Federal, state and utility credits, rebates and other discounts make the current EV buying landscape very favorable. However, incentives can be difficult to identify and understand.

Here’s how you can stack them all to truly make the most out of your EV purchase.

Breaking down available incentives

There are two categories of incentives potential buyers should investigate when considering an EV purchase: vehicle incentives and home charging incentives. Leverage federal resources and search tools provided by automakers, charging providers and other entities to identify potential incentives. These incentives are not mutually exclusive; Americans can often stack them on top of each other to maximize the savings.

Vehicle incentives help lower purchase prices and may be available at the federal, state, and local level. Current federal tax credits apply to both new and pre-owned EVs. Drivers considering new EVs may be eligible for tax credits of up to $7,500, while drivers interested in pre-owned options can save up to $4,000. The amount you receive depends on a few factors, such as the cost of the vehicle, your income level, where the car was assembled and where materials were sourced from.

State-level incentives vary across the country. Colorado, for example, has long since offered one of the most robust state tax credits, and that incentive recently increased. Eligible EV buyers in the state could receive $5,000 toward an electric car and up to $12,000 for an electric truck. And that’s before you factor in the federal credit! Increasingly, state incentive structures are changing to increase equitable distribution. For example, California’s Clean Vehicle Rebate Project incentives for all-electric vehicles are limited to individuals earning less than $135,000 per year.

As for home charging, some utility providers offer incentives to help mitigate the costs of charging. Utility incentives reward you for charging during off-peak periods and offer support with various elements, such as charging equipment, installation, and electrical upgrades. When I was purchasing my own EV, my utility provider, Dominion Energy in Virginia, offered a rebate for qualified charger purchases as annual rewards, which helped lower the cost EV ownership.

Play the long game

One major roadblock to mass EV adoption is affordability. That’s where these incentives come in. They’re a huge benefit to helping cut the cost of EV ownership. When you only look at upfront costs, the initial payment for an EV is higher than comparable internal combustion engine (ICE) vehicles, on average. But the initial cash outlay shouldn’t be the only factor determining your purchase or lease decision.

This is where a mindset shift is necessary. Instead of only focusing on the upfront costs, looking at the total cost of ownership (TCO) will give buyers a fuller picture of costs over the lifetime of a vehicle. When you account for savings associated with charging, maintenance (or lack thereof), and overall operations, EVs are a more cost-effective option in the long-term.

Make the most out of everything available

It’s not about choosing one incentive or another. Many people are eligible to stack incentives to further their savings. For example, taking part in your utility providers’ charging incentives while simultaneously taking advantage of the state and federal incentives for the purchase of your vehicle is a combination that results in money saved.

It’s important to ask questions and do your research to figure out all incentive options available for your EV purchase and related expenses. From utilities to federal agencies, tools are available to help discover incentives and provide estimates for overall costs. Equipped with this knowledge, consumers will be on a path to make informed and more affordable EV investments.

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