November 13, 2023

Electric vehicle rebates and incentives: A comprehensive guide

Who doesn’t want to save money on their next vehicle purchase? One of the more appealing aspects of shopping for an electric car or charging station is the wide range of federal, state, local, and utility incentives available, which can add up to thousands of dollars of savings. Navigating all of the available EV and EVSE incentives can feel a bit daunting, especially for first-time EV buyers. Fear not! We’ve done the homework and mapped out the current landscape of incentives below.


Federal EV tax credits

EV incentives from the federal government for the purchase of an eligible vehicle are substantial and can amount to a $7,500 tax credit. Prior to April 2023, the exact credit requirements were dependent on a North American-produced vehicle’s battery size beginning with a base amount of $2,500, an additional $417 with every kilowatt hour of capacity beyond 5 kWh and an additional $417 for any vehicle with at least 7 kWh of capacity.


For April 2023 and beyond, 50% of the EV battery must be assembled and manufactured in the U.S., while 40% of the battery minerals and components must by extracted or processed in the U.S. This percentage increases by 10% through 2029 for battery assembly and 2027 for critical mineral requirements. For 2024, the requirements increase to 60% and 50%, which is projected to reduce the tax credit for some vehicles, such as the Tesla Model 3, which goes from being eligible for the full $7,500 down to $3,750.  Used EVs and plug-in hybrids don’t have that component restriction, with used battery electric vehicles getting a credit of $4,000 if purchased from a dealer for $25,000 or less.


For example, prior to January 2023 the Hyundai Ioniq 5 was eligible for a $7,500 credit due to its large battery size and the federal government’s lack of production origin requirements. With the latest tax credit guidelines, a Korean-made Hyundai Ioniq 5 wouldn’t qualify for any incentive, but an American-built Volkswagen ID.4 will qualify for the full $7,500 tax credit. A used Hyundai Ioniq Electric mentioned earlier would get a $4,000 credit if it was purchased for $25,000 or less, which it commonly can be. Check out the Environmental Protection Agency’s qualified vehicle list if you’re wondering exactly what amount is offered for a certain vehicle.


As of January 2023, the credit is unlimited, meaning unlike years past where a manufacturer only qualified for the credit before their sales reached over 200,000 for their EVs or PHEVs, customers can continue claiming the credit for any EV or PHEV model as long as it qualifies. Manufacturers like GM and Tesla, who account for a combined 56% of the US EV market, lost their tax credit eligibility before the new rules came into place are eligible again as of January 2023.

Importantly, a tax credit is not a direct payment. It applies to what is owed to the federal government by an individual at the end of a given tax year. In other words, if you owe $20,000 in federal taxes for the year and are eligible for the full $7,500 credit, the amount you owe will be reduced by $7,500. Notably, you can’t receive a larger EV tax credit than you owe in taxes. For instance, if you owe $6,000 in taxes for a year, your credit will only be $6,000, and the credit can’t be rolled into the next year.


2024 EV Tax Credit

For 2024, consumers have the option of using that credit as an instant rebate. Utilizing the IRS’s new Energy Credits Online portal, dealerships can register to receive IRS payments in advance of using the tool to submit transaction data from EV and PHEV sales starting January 2024. When submitted, the online tool will assess the vehicle’s eligibility for the credit and give the consumer the option to transfer the credit to the dealer or not. This allows EV buyers to reduce the upfront cost of a new EV by up to $7,500 and $4,000 for used at the point-of-sale, minimizing a key hurdle of EV ownership.


In an electric vehicle lease however, the manufacturer instead receives the tax credit. Consequently, while you’re shopping, it’s important to make sure that the cost is rolled into the overall lease—typically, the tax credit will be structured into your payment, but this is up to the dealer, so it can be a good bargaining tool as part of negotiating a lease for an electric car.


State EV and EVSE incentives

State incentives for electric vehicles vary depending on certain factors, including the type and battery size of the vehicle purchased (similar to the federal tax credit), whether the car is purchased or leased, and in some cases eligibility requirements such as the buyer’s household income. Most often, states offer cash rebates, as opposed to electric vehicle tax credits.


For example, in Massachusetts EV buyers are eligible for a base $3,500 cash rebate for a new or used EV while income-qualified buyers can get an additional $1,500. When paired with the 2024 federal tax credit applied at point-of-sale, Massachusetts consumers can get up to $12,500 off the cost of a new EV.


Because state-specific incentives frequently change and evolve, it’s best to check what is available before shopping for a new EV. Many state incentive programs change year-to-year, or even expire. Some incentives are also only available to commercial businesses, not individual consumers.


Key 2023 and 2024 state incentives to keep an eye out for include:


Utility EV rebates

Many utilities also offer rebates for the purchase of an EV. A California driver living in the Southern California Edison service area, for example, could be eligible for an additional EV rebate of up to $4,000 from the utility depending on their income-status.


Some utility incentives include low-cost EV chargers for their residential customers that they don’t have to own, conducting electrical upgrades and providing the charger for a low, fixed rate. In 2022, Enel X Way partnered with Florida Power & Light to provide JuiceNet®-enabled JuiceBox® smart charging stations as part of its FPL EVolution Home Program. Through the program, FPL utility customers can receive a JuiceBox Level 2 smart charger for a $31 fixed monthly fee if a customer already has a permitted 240-volt circuit or a $38 fixed monthly fee if a customer needs a 240-volt circuit. Included in that fee is unlimited off-peak renewable electricity for charging as well as the cost of the charger, plus all installation, engineering and permitting costs. The program has been a win-win for customers who get a utility-provided home EV charger and the electrical upgrades needed to make it possible all in one place.


EVSE rebates

There are many rebates available for the installation of an EVSE charging station (or in some cases, multiple installations), across the federal, county, and city levels, as well as from utilities.


The federal government offers residential customers who buy a JuiceBox Level 2 smart charging station from Enel X Way an additional tax credit of 30% off the purchase and installation cost, up to a maximum of $1,000. Purchase and installation made on or after January 2023 must be done within a low-income or non-urban community to qualify and is claimed on your income tax return.


Utility EVSE rebates

Counties, air quality districts and utilities offer a wide range of EVSE incentives that vary for residential and commercial installations. It’s best to see what incentives are available in your area and where you might be able to save. In many cases, utilities have programs with rebates and credits that will cover the cost of a JuiceBox or other EVSE charger purchase. These EVSE incentives can be a great way to have your cake and eat it too, with a new smart charger that allows you to maximize use of renewable energy and save money charging at the same time.


Below is a list of utilities that offer EVSE rebates for residential customers. Whether you are eligible for one of these utility rebates or not, you can purchase a JuiceBox here.


Many utilities also offer rebates to cover the purchase of a residential EVSE and offer rate plans for EV owners that incentivize off-peak charging. Enel X Way has a comprehensive guide on time-of-use (TOU) rate plans, and what you need to know to save on electricity while charging at home. 


When it’s time to buy

When you’ve decided it’s time to go electric—or in the case of current EV owners, stay electric—it’s a good time to take a comprehensive look at what EVSE incentives are available specific to your vehicle of choice and where you live. The wide combination of available incentives at the federal, state, local and utility levels can lead to huge savings, and in the case of the federal income tax credit, buying a qualified vehicle sooner rather than later could be highly beneficial before phase outs of the credit take effect. Whichever EV you choose, it’s good peace of mind knowing there are significant savings to be had as you take an important step in helping the world decarbonize transportation.

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