Electric vehicles (EVs) can save consumers money, and not just on fuel. The 18,000 electric vehicles sold last year earned a combined $150 million in federal and state tax credits, according to Inside Line.
Federal tax credits of up to $7,500 per vehicle totaled $135 million. The credit is deducted from a taxpayer’s bill, so buyers have to wait until tax season to get their money back. The amount each individual receives is based on their tax bill; if a person’s bill was less than $7,5000, they would only get that smaller amount back. The Obama administration recently proposed increasing the rebate from $7,500 to $10,000, and having the credit available at the point of sale, instead of on a tax return.
In addition, several states offer tax incentive programs for EV purchases. There are over 500 of these programs, including one in California that offered up to $5,000 in the first half of the year and $2,500 in the second half.
These programs were meant to encourage people to buy more environmentally-friendly cars; buyers needed incentives because of EV’s relatively high cost and the small selection currently available. The bestselling EV last year was the Nissan Leaf, with 9,674 sold. The Leafs earned up to $72.5 million in federal tax credits, assuming every buyer was able to claim the full $7,500 per car.
In second place was the Chevy Volt, with 7,671 cars sold. The numbers drop off considerably from there, as Nissan and Chevy were the only mainstream manufacturers to offer mass-production EVs. Tesla sold an estimated 300 Roadsters, and Fisker sold 70 Karma sedans; both are limited-production luxury vehicles that cost around $100,000 each.
At $29,975, the Mitsubishi i is the cheapest EV on the market, but a mid-year lanuch and golf cart-like performance limited sales to 80, just ten more than the Karma. Daimler said it leased 250 Smart EVs to U.S. customers last year, but those pod cars are more like test vehicles than production models. Meanwhile, Ford sent to 10 Focus EVs to commercial customers, including Google, well before the Focus was scheduled to go on sale to the public.
Will more EVs roll off showroom floors in 2012? Nissan hopes to double its Leaf sales this year, while GM hopes to sell 45,000 Volts. Tesla isn’t making any cars right now, but the company plans to roll out the Model S sedan later this year. Fisker will also introduce a new model this year, the Atlantic, although it still has not decided where to build it. Both the Tesla and Fisker will be cheaper than their predecessors, costing around $60,000. Ford will sell its electric Focus to the public, while other carmakers (Volkswagen, Audi, Honda) are leasing prototype EVs to customers for testing.
Electric vehicles accounted for just a few of the millions of cars sold in the U.S. last year, but they certainly saved their drivers money on taxes. We’ll see if that is a good enough incentive as more EVs roll of assembly lines.
- GM may be the next automaker to lose its electric car tax credit
- Tesla cuts the price of the Model 3 again, this time by $1,100
- Karma Automotive continues clawing back from the brink with three new cars
- Tesla cuts prices by $2,000 to offset reduced tax credit
- Tesla cuts workforce by 7 percent, ends referral program to trim costs