U.S. Government Pays $580 Million To Dealers As U.S. EV Buyers Choose EV Tax Credit

The Clean Vehicle Tax Credit has become a hot topic for electric vehicle (EV) buyers in the U.S. as it allows them to receive $7,500 in tax credit for their EVs. Now, a shift in the EV industry has been clear. According to data released by the U.S. Treasury Department, 90 % of buyers choose the tax credit option upfront. 

The reason for upfront payments being a popular choice is that the buyers get the full amount of the EV tax credit, regardless of their tax liability. As a result, this shows that upfront payments will always have buyers get the full EV tax credit amount compared to traditional payment methods. 

Before the Inflation Reduction Act in 2022, people who bought a new EV could only claim the EV tax credit on their next year’s tax returns. However, since January 1st of 2024, people have had the option to get the credit upfront, leading to an immediate cut in the price of the EV.

Moreover, as the EV tax credit does not apply to all EV models, automotive companies and dealers have offered advanced payments. These payments allow buyers to have discounts, down payments, or cash payments that match the amount of the EV tax credit as it is now a popular choice for buyers to get. With the addition of the EV tax credit and the incentives that the companies and dealers offer, EVs are slowly becoming more accessible and popular. 

Ever since then, about 100,000 time-of-sale reports for new and used EVs have been filled by dealers to the IRS since Jan 1, followed by the U.S. Treasury Department issuing $580 million in advance payments in response. 

Through the efforts and initiatives of the EV tax credit, the demand for EVs has been quite favorable. With this mass amount issued by the U.S. Treasury Department, it is very clear that the result of the EV tax credit is working and plays a positive part in EV adoption. 

With optimism from the U.S. Treasury Department, the success of the EV tax credit underlines the emergence of EVs being more accessible and cheaper to the public while making the environment cleaner and the EV industry in the U.S. grow larger and better.  

Want to learn more about EV? Thinking of buying an EV? Head over to EV.com discover more.