Want to Save Money? Buy an EV.
EV drivers come out ahead when accounting for fueling and maintenance. With the low cost of at-home charging and government incentives, driving an EV is more affordable than you may think.
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Are EVs Affordable?
Like any new technology, prices stabilize as supply chains become more efficient and as more options become available. EVs are generally expected to reach price parity with gas-powered vehicles in the next couple of years.
Many EV models that cost the same or less than a gas-powered vehicle are already available, with new models entering the market to meet growing demand. At the same time, the used EV market is growing. Pre-owned vehicles account for 70% of car sales in the US.
But that is only part of the story. Over the lifetime of the vehicle, an EV is expected to save drivers $6,000-$12,000 due to lower fueling and maintenance costs.
Many electricity providers have programs designed to help EV drivers install at-home Level 2 charging, access lower electricity rates, and other incentives. Check with your local provider to see if you can benefit from some of these programs!
What should I know about these tax credits?
Federal and state-level tax credits are available to help lower the cost of new and used EVs for drivers.
The Inflation Reduction Act includes credits that help reduce the cost of new and used EVs, as well as at-home charging equipment, for eligible individuals.
Meanwhile, many states and local governments offer incentives to transition to zero emission transportation.
Up to $7,500
Up to $4,000 or 30% of vehicle cost, whichever is lower
Individual Credit: $1,000 or 30% of the installed cost or whichever is of lesser value.
Census Tract Required.
Maximum Adjusted Gross Income (AGI) for credit eligibility:
- $150,000 for Single filers
- $225,000 for Heads of Households
- $300,000 for Joint filers
Maximum vehicle MSRP for credit eligibility:
- $80,000 for vans, SUVs, and pickup trucks;
- $55,000 for all other vehicles.
Vehicles must meet manufacturing criteria to be eligible.
Maximum vehicle sale price for eligibility: $25,000
Maximum AGI for credit eligibility:
- $75,000 Single
- $112,500 Head of Household
- $150,000 Joint filers.
Census Tract Requirement: Limits eligibility to infrastructure installed as defined by 45D(E) census tracts and non-urban census tracts:
- A population census tract where the poverty rate is at least 20%, or
- Non-metropolitan area: the median family income < 80% of the statewide median family income
- Metro-area: the median family income < 80% of statewide median family income or the metropolitan area median family income
Up to $7,500
Maximum Adjusted Gross Income (AGI) for credit eligibility:
- $150,000 for Single filers
- $225,000 for Heads of Households
- $300,000 for Joint filers
Maximum vehicle MSRP for credit eligibility:
- $80,000 for vans, SUVs, and pickup trucks;
- $55,000 for all other vehicles.
Vehicles must meet manufacturing criteria to be eligible.
Up to $4,000 or 30% of vehicle cost, whichever is lower
Maximum AGI for credit eligibility:
- $75,000 Single
- $112,500 Head of Household
- $150,000 Join filers.
Maximum vehicle sale price for eligibility: $25,000
Individual Credit: $1,000 or 30% of the installed cost or whichever is of lesser value.
Census Tract Required.
Census Tract Requirement: Limits eligibility to infrastructure installed as defined by 45D(E) census tracts and non-urban census tracts:
- A population census tract where the poverty rate is at least 20%, or
- Non-metropolitan area: the median family income < 80% of the statewide median family income
- Metro-area: the median family income < 80% of statewide median family income or the metropolitan area median family income
What about the battery?
One common misconception about EVs is that the battery will require replacement, similar to batteries in gas-powered vehicles. This is extremely unlikely. An analysis by Recurrent showed that only 1.5% of vehicles analyzed required a replacement (excluding manufacturer recalls that resulted in a battery replacement).
Your battery is likely to outlast the vehicle that surrounds it—in fact, most EV batteries will be repurposed for other uses after the vehicle is retired, such as for energy storage or recycled content for new EV batteries.
Battery warranties cover the cost of a battery replacement if necessary. The federal minimum warranty of 8 years or 100,000 miles—longer than most gas-powered vehicle powertrain warranties!
