The new EV models like the Chevy Bolt featured last month are already providing a better value for your money than ever before. This is due in part to advancements in technology and to the volume of sales that brings the price down. It is also due to the strong incentive programs listed below that may never be better than they are right now through the end of the year.
The following information about the EV incentives may help you reach our Personal Climate Accord goals. See if you can spot the two substantial reasons that may make this the best time to act.
The sales volume is attributable to all of us who have put our dollars into the things we believe in our hearts. Every EV driver who has invested in any battery electric vehicle has made it possible to have better EVs and more reasonable prices. My hat is off to each and every one of you for stepping up!
The incentives involve a lot of details that can impact your results including some incentives being lower for plug in hybrid electric vehicles (PHEVs) but the big picture looks like this:
- The Federal Government will give a credit (on Form 8936against the tax you owe the IRS of up to $7,500 in the year you purchase an electric vehicle
- The Feds will give that credit to leasing companies who can then pass part of the savings on to you when you lease. The result is a great car leased for less than you might believe.
- The State of California will send you a CHECK of up to $2,500 when you LEASE or purchase a battery electric vehicle with more than an 80 mile range (some restrictions may apply). The rebate check will pay back a good part of a lease down payment – sometimes all of it.
- The State will add up to $1,500 to that amount for people who qualify due to low income.
- California will issue a sticker for qualifying electric vehicles that allows only one person to be in the car when using the Car Pool Lanes (High Occupancy Vehicle lanes or HOVs).
- If you drive a new or used Electric Vehicle, you may be eligible to receive a $450 Clean Fuel Rebate from Southern California Edison. Other regulated utilities also provide rebates including PGE.
- The County of Ventura has just started a program to provide a rebate of up to $2,200 to make leasing and purchasing even more affordable. There are only 142 rebates available on a first come first served with lots of details involved and some restrictions as discussed below.
There is a Federal Tax Credit for the cost of a charging system as detailed in the instructions for Form 8911. There are also financing programs that will let you install EV charging equipment on your home. You may not even need an upgraded home charger depending on your situation. EV charging is a big subject and we will look into that in the coming months.
Dealers and manufacturers often have incentive packages including free charging. There is information about these as well as more links about the credits and rebates on the web page accessible below.
The Big Deal – Federal Tax Credits
These credits cut the cost of leasing an EV and may cut your cost of purchasing one. The details make a difference so let’s look at those.
Leasing an EV
All of us can get the benefit of lower leasing costs and these are the easiest incentives to get. All you need to do is find a lease you like on a car you like. Different leasing companies will have different deals though they all need you to lease the vehicle for a minimum of three years.
You may not be inclined to lease a vehicle. However, the leasing companies can claim the tax credit of $7,500 (for most models) on the vehicle and they will pass some part of that savings on to you. This creates a strong benefit to leasing when most of the $7,500 cost is reduced over the term of the lease. Many people have chosen to lease because they want to keep their options open with rapidly developing technology.
Purchasing an EV and getting a Federal Tax Credit
This is where the difference between a Tax Credit and a rebate becomes really huge. The most straight forward way to understand this difference is to understand that the credit means reducing how much tax you pay and a rebate means you get a check. If you purchase an EV you would apply for the tax credit when you file your taxes for the year. If you owe $10,000 in taxes, the credit would reduce the balance due up to the $7,500 limit. If you owe $3,000 in taxes, the credit would reduce the balance due down to zero. And no, you cannot carry the rest of the credit over to the next tax year.
Since we are talking about taxes, there are lots of details that come up depending on how complicated your returns are at this point. That is to say – talk to your accountant to make sure this will work for you.
State EV Rebates
There is a trick with the State Rebate program. First of all there are personal income limits that may reduce the amounts you will get. Secondly the total amount of money available is a specific amount in each annual State budget. When that amount is used up, the rebate applications are put on a waiting list until the funds become available. The word is that they are currently available only for people who qualify as low income and they are on hold for everyone else. The legislature is working on changing this.
Ventura County EV Incentive Program
The Electric Vehicle Advocates of Ventura (EV Advocates for short) have been working closely with the county to get a good rebate program working. This program just started and has only a limited number of rebates available. The EV Advocates are the same people who have been putting on the EV showcases with the Ojai Valley Green Coalition for almost six years now.
The Plug-in Electric Vehicle Rebate Program amounts are $2,200 for the purchase or lease of a new All Electric Vehicle and $1,100 for a Plug-in Hybrid. Eligible vehicles must be Model Year 2017 or newer. The whole county only has 61 All Electric Vehicles rebates and 81 rebates for Plug-in Hybrids. There is a $75,000 Base MSRP cost cap for a qualifying vehicle.
Applicants must apply for a rebate reservation as a first step on a first come first served basis. Applicants with a valid reservation number may then apply for the rebate using the Rebate Application form after they have purchased or leased the new electric vehicle. Applicants have 8 weeks to use the reservation after it is issued or the reservation will expire and another one will be issued to the next applicant on the list.
There are additional details that go with this and you can learn more by referring to the FAQs page. You can get additional information by phone (805) 645-1408 or by email email@example.com.
Dealer and Manufacturer Incentives
People interested in purchasing a Tesla might want to know that they can get a discount if they know a Tesla driver. The existing Tesla drivers can give you a personal code number that will reduce the price of purchasing a model S or model X by $1000. There are lots of drivers willing to provide their code so get in touch with the Coalition if you need a new EV friend to help with this.
This is a good example of one of many manufacturer and dealer incentives. There are some companies providing public charging packages that can influence the total value of the vehicle. The value of those can be understood by knowing that EVs typically use on one kilowatt hour of energy to travel three miles and sometimes even further. Home electricity rates for a kilowatt hour range from ten to eighteen cents under typical charging conditions. OK that is for us techies – contact us if you want help figuring those sorts of things.
Why this could be the best time for these incentives
Did you spot the two big reasons that now might be the best time to get these incentives? Here are the two big ones:
- The Ventura County program is coming from a source of funds that may not be available again and there are a limited number of those available.
- The Federal Program is subject to the winds of change happening in our Federal Government. If that changes you might be kicking yourself for missing it.
California Clean Vehicle Rebate
IRS Home Page www.irs.gov
List of qualifying cars and credit amounts http://www.irs.gov/businesses/article/0,,id=219867,00.html
Plug-In Electric Vehicle Credit (IRC 30 and IRC 30D), IRS, Oct. 28, 2009. https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d
Notice 2009-54: Qualified Plug-in Electric Vehicle Credit, IRS, June 29, 2009. https://www.irs.gov/irb/2009-26_IRB/ar07.html
Notice 2009-58: Qualified Plug-In Electric Vehicle Credit Under Section 30, IRS, July 27, 2009.