USA: Car dealers can immediately refund electric vehicle buyers $7,500

USA: Car dealers can immediately refund electric vehicle buyers $7,500

Washington, October 11, 2023

Starting in January, car dealers will be able to provide immediate refunds to buyers of certain electric vehicles, with potential tax credits of up to $7,500, according to new guidance from the U.S. Treasury Department. The guidelines allow dealers to reduce the price of an electric vehicle by up to $7,500 at the time of purchase, rather than forcing customers to wait until tax filing.

• To qualify, an electric vehicle must have a battery capacity of at least seven kilowatt hours.

• The manufacturer’s suggested retail price is also capped at $80,000 for SUVs and pickup trucks and $55,000 for regular electric vehicles.

• Buyers cannot claim the credit if their income exceeds $300,000 for married couples filing jointly or $150,000 for most single taxpayers.

• Merchants can now redeem the credit as a rebate at the point of sale or offer it as cash, requiring registration through an IRS portal.

• The move aims to boost electric vehicle adoption in line with the Biden administration’s goal of reaching 50% electric vehicle market share in new vehicle sales by 2030.