On Jan. 1, new regulations went into effect which encouraged some buyers to consider buying an EV.
Under the updated IRS Code Section 30D, buyers who meet certain income thresholds can get up to $7,500 for North American-assembled new EVs that meet certain sticker price restrictions, or up to $4,000 for a used EV at least two model years old up to $25,000.
This is a much more enticing offer than previous years, where EV buyers had to get their credits as part of their tax return filings the following year — and according to a recent report by the government, it seems to be working.
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On Feb. 14, the Treasury announced that from Jan. 1 to Feb. 6, the U.S. Government has reimbursed car dealerships about $135 million in advance point-of-sale consumer EV tax credit payments under the newly implemented ruling.
According to the government, the Internal Revenue Service has received more than 25,000 time of sale reports, with 78% of them including advance payment requests since the start of the year.
In a statement, Deputy Treasury Secretary Wally Adeyemo noted that this new regulation is a sign that there is still consumer demand for EVs and that the ability to turn federal EV tax credits into these upfront discounts will only make the industry blossom.
"One month into implementation of this provision, there is strong demand for this new upfront discount, which will continue momentum in growing this industry in the United States," Adeyemo said.
The government disclosed that out of the 19,500 requests for advance payment, 17,500 of them went towards new EVs and 2,000 were for used EVs.
Though the new regulations have put more EVs out on the road, many EVs on the market lost their eligibility for tax credits as the Treasury's FEOC guidelines aimed at diverting the EV supply chain away from China went into effect — dramatically changing the list of qualifying models.
According to data from the U.S. government's portal at fueleconomy.gov, at of the time of this writing, 27 EVs and PHEVs are eligible for some federal tax credits ranging from $3,750 to $7,500.
Customers who do wish to obtain the tax credit must meet certain income limits to qualify — which is $300,000 for married couples and $150,000 for individuals.
More Business of EVs:
- A full list of EVs and hybrids that qualify for federal tax credits
- Here’s why EV experts are flaming Joe Biden’s car policy
- The EV industry is facing an unusual new problem
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