Electric Vehicle Basics
Electric Vehicle Basics
By D.S. Mitchell
Worth Looking Into
The financial benefits of owning and driving an electric vehicle play out in the long run. To begin with, you’ll spend a bit more on the purchase price for an electric car, but you can make up for that cost with tax benefits and immediate savings on fuel. There are also local rebate options worth checking into. Electric vehicles are also really good for the environment, which is enough to convince buyers.
1.) Purchase Price: Government subsidies to off-set the higher sticker cost of an EV versus an ICE (internal combustion engine) are helping purchasers switch from a gas powered vehicle to an electric vehicle. Currently, tax rebates and auto maker incentives provide about $7,500 toward the purchase price of an EV. EV costs are continuing to drop, and Bloomberg has predicted that EV battery costs will halve by 2025. At which point electric and gas vehicles should be at price parity. A couple things to keep in mind about the EV tax credit include:
- Tax credits are for owners only.
- The federal tax credit is not available to those simply buying an electric car in order to resell it.
- In order to qualify for the federal tax credit, the electric car must be mostly used within the U.S.
- The manufacturer must be qualified for your car to be eligible.
- The battery of the EV must be able to store at least 4 kWh of energy.
- The battery must also be able to be charged by an external energy source.
- An electric vehicle tax claim can be denied, the IRS always has that right.
Other tax credits, especially state and local, for electric cars apply to businesses. Sometimes, a business can enjoy tax exemption status of some sort as reward for owning an electric company car.
