Shocking News: Electric Vehicle Rebate Programs Run Out of Money

The Illinois EPA electric vehicle program is out of money – Bad news if you still haven’t applied for the Illinois EPA electric vehicle rebates – the program is now out of money. The agency says the number of applications has surpassed the amount of funding, $12 million, for the fiscal year. The program offers $4,000 to people who have bought EVs within 90 days. Moving forward, the agency says it will prioritize applicants who qualify as low-income. But can those people afford a new car?

California’s EV rebate program has run out of funds too. Effective November 8, 2023, CVRP is closed to new applications. California is eliminating its popular electric car rebate program — which often runs out of money and has long waiting lists — to focus on providing subsidies only to lower-income car buyers.

The Clean Vehicle Rebate Project, in existence since 2010, will end when it runs out of money this year. In its place, the state will expand a program next year that provides subsidies only to low-to-middle-income residents — those who have more trouble affording electric cars.

A representative stated: “The goal here is not to eliminate options for one group of motorists at the expense of another, but to assist those who’ve been unable to purchase a cleaner vehicle.” But this is exactly what California is doing.

New Jersey paused their electric vehicle rebate after running out of money. Prospective electric vehicle buyers and those leasing in New Jersey could be in for a shock after it was revealed that the local government will soon pause a rebate program. 

The Charge Up New Jersey program has been in operation since May 2020 and provides New Jersey residents with up to $4,000 when they purchase or lease a new electric vehicle. The program has provided roughly $90 million in incentives over the past three years. 

Other states are struggling to keep their programs funded. Some states are only offering tax credits to low-income residents who can’t afford any new car. Keep in mind, a new car means higher insurance, a charging station, and car payments. If you look at who is taking the current rebate, wealthy drivers who earn over $125,000 have been taking advantage of the money. Which is smart if you can afford it, but now other states are looking to change the rules too. 

We have covered other countries ending their EV subsidies; Germany, New Zealand, England, and France also limit their EV credits.

Here in the USA the current rules per have changed for 2024, only 12 vehicles are eligible for the $7500 tax credit. Some brands are offering a rebate but dealers have to pass that along to the customer.

Federal Tax Credits for Plug-in Electric and Fuel Cell Electric Vehicles Purchased in 2024 Up To $7,500

All-electric, plug-in hybrid, and fuel cell electric vehicles purchased new in 2024 or after may be eligible for a federal income tax credit of up to $7,500. The availability of the credit will depend on several factors, including the vehicle’s MSRP, its final assembly location, battery component and/or critical minerals sourcing, and your modified adjusted gross income (AGI). For 2024, 12 cars are eligible. Some manufacturers are offering the credit directly, while also increasing the price of those electric vehicles.

Qualified vehicles purchased for 2024 may be eligible for a tax credit of up to $7,500. Pre-owned vehicles purchased in 2024 or after are eligible for a tax credit of up to $4,000. There are price limits and each state may offer local tax incentives. Be sure to do your homework before deciding on a vehicle.

If your state still has funds there are these critical facts that will offer a tax credit, not a rebate and not a check. For, all-electric cars and trucks that qualify for a full refund, they must be assembled in the United States, with a certain percentage of “critical materials” mined or processed in the United States or from a free trade agreement partner, and a certain percentage of battery components made in North America. This percentage will increase in 2025, 2026 and increase annually.

It’s tricky. After complaints from trade partners in Korea, Japan, and Europe, the U.S. Treasury came up with a workaround: The tax credit is available for non-qualified vehicles if a car is leased. It’s the dealer who actually gets the leasing tax break, and it’s up to the manufacturer how much to apply to a customer’s lease deal. Many dealers are willing to give the full amount to the customer, but not all, so the customer needs to pay close attention to how the deal is structured.

This is truly a buyer beware and make sure you are prepared with your own math. If you are not getting what you want, never be afraid to walk away and find another dealer or brand.

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