The federal government has issued more than $1 billion in tax credits for new and used electric vehicles as an upfront cash incentive to car buyers, the Treasury Department and IRS said.The credits for new and used cars, for a respective $7,500 and $4,000, were previously available only when EV buyers filed their annual tax returns.Previously, consumers had to wait until filing their annual tax return, perhaps months or more than a year after their vehicle purchase, to get the federal credit.
However, not all new EV models are currently available for a federal tax credit, as automakers aim to meet certain manufacturing standards in the Inflation Reduction Act. The law requires certain parts of the car be manufactured in North America to qualify for a full or partial EV credit.Since the start of the year, about 125,000 consumers have opted to get their "new clean vehicle" tax credit as an upfront payment, according to Treasury and IRS data.
These figures account for just "a small amount" of all EVs sold in the U.S. since the start of the year, Adeyemo said. They don't include consumers who lease EVs or purchases that don't qualify for credits.in May to end federal tax credits available for electric vehicles and a separate one to end the tax breaks for EV charging stations.