In 2024, America’s EV Subsidies Will Be Available Instantly
No more waiting for that $7,500 tax credit to kick in.
Starting next year, Americans will be able to get a big discount on a qualifying electric vehicle right when they buy it at the dealership, the Treasury Department announced today.
It’s one of the final — and most important — tweaks made to the EV tax credits under President Joe Biden’s climate law, the Inflation Reduction Act.
The new program will let people instantly use the $7,500 tax credit for new EVs and the $4,000 credit for used EVs at purchase. In essence, buyers will transfer their tax credit to the dealership at the moment of sale, allowing dealers to give them a direct discount on the price of a vehicle, according to new Treasury Department rules.
Before this, Americans couldn’t get the tax credit until they filed their taxes the following year and received their rebate from the IRS. That meant, among other things, that people couldn’t use the discount before financing the car, effectively increasing their month-to-month payment.
A study published last year — coauthored by researchers from George Washington University and Volkswagen — found that Americans placed vastly more value on an immediate rebate over having to wait til next April. Poorer households and used-car buyers especially valued the instant access to a discount.
The point-of-sale rebate is one of a slew of changes made by the climate law to America’s EV subsidies. In January, the law placed price caps on which cars qualify for the EV tax credits, eliminating subsidies for six-figure luxury vehicles like the Hummer EV. It also opened the $4,000 tax credit for pre-owned EVs.
We’ll have to see how widely automakers and dealerships will choose to participate in the new instant-rebate program. To join the scheme, a dealership or seller will have to register with the IRS ahead of time on a new website. After someone buys an EV, the seller will receive a payment for the credit within 72 hours, according to the agency.