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With $7,500 Tax Credit Coming Soon, Don’t Miss the Affordability Deadline


The runway is looking shorter for two new affordable electric vehicles from Toyota and Nissan.

That’s because both brands are getting pretty close to the sales barrier that will no longer allow buyers to claim the full $7,500 federal EV tax credit — which could make a pretty big difference for reviewers Toyota bZ4X or Nissan Ariyacorresponding.

The credit, known as the 30D by the IRS, has made a life-changing difference for many families — helping them buy an all-electric or plug-in hybrid vehicle sooner than they could otherwise. . As the biggest consumer incentive offered by the federal government to help drive adoption of electric vehicles, it’s widely supported — and it also helps automakers cut costs. charges for expensive battery packs.

Although there is still a chance improved and renewed EV tax credit—Offering up to $12,500 each — can be passed, we still have the tax credit available for the foreseeable future. And under its rules, when automakers sell 200,000 eligible hybrid and/or electric vehicles, they trigger a 12-month phase-out starting next quarter.

2019 Tesla Model 3

2019 Tesla Model 3

Tesla hit its 200,000-vehicle cap in Q3 2018, bringing the credit to be phased out entirely after December 2019. GM is a quarter behind, with a full phase-out by the end of March 2020.

It should be noted that the EV tax credit won’t go away once those automakers hit the threshold. The next quarter, the tax credit is half the amount ($3,750 for electric vehicles), and then two quarters later it drops to a quarter of the full amount ($1,875) for two calendar quarters. .

Since removing the EV tax credit, Tesla has largely shifted its prices up, while GM has worked to keep its lowest-priced EVs affordable. Along with the product refresh, it has repositioned 2022 Chevrolet Bolt EV and EUV, making it about $5,500 off the price. However, Nissan has applied almost the same discount to its Leaf – making it The cheapest electric car in the US market.

2022 Chevrolet Bolt EV

2022 Chevrolet Bolt EV

Follow Loren McDonald at EVAdoptionThree other automakers currently have cumulative sales of more than 150,000 for the phase-out period: Toyota, Nissan, and Ford.

Toyota is the closest, with about 190,000 vehicles eligible through 2021 according to McDonald’s final estimates (not reflected at that link).

Officially, Toyota Motor North America says that it probably won’t hit the 200,000-unit ceiling until “the second half of 2022”.

Toyota is not willing to give an exact number and it cautions that its own time estimates are only speculations, depending on various market factors.

Toyota RAV4 Prime XSE 2021

Toyota RAV4 Prime XSE 2021

Some of those issues — such as supply-related issues with chips and components — will include how it can keep up with the pace at which it delivers plug-in hybrid Prime models. Toyota sources have also suggested that it could be soon expanding Prime plug-in hybrid product line—With Highlander Prime, for example.

The completion of the 200,000 vehicle credit could come faster than Nissan had predicted months ago. Last week, it noted that Leaf had its best February sales in eight years, with a 300% increase in Leaf interest, based on traffic to its consumer website. .

The Leaf achieved cumulative sales of 165,000 by the end of 2021. Considering the spike in Leaf sales, the total is likely to have passed 170,000 and could reach 175,000. Nissan only updates US sales quarterly, so we might have a better picture of that as soon as next week.

2023 Toyota bZ4X at EVgo charging station

2023 Toyota bZ4X at EVgo charging station

The affordability of both of these models will depend heavily on the EV tax credit and to some extent, other incentives. The BZ4X is expected to start at under $40,000, while Nissan says the base version of the Ariya will start around $40,000.

With Ford’s higher expected production numbers for both Mustang Mach-E and it F-150 Lightningit could also hit the 200,000 mark next year — depending on how quickly those models’ prices rise and whether there are other supply issues.

All of this could change if Congress decides to increase the tax credit. But if you’re depending on the EV tax credit for affordability, our best advice: Book as soon as those base models go live.



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