Treasury Paid Over $135 Million In Advance EV Rebates Since January

Treasury Paid Over $135 Million In Advance EV Rebates Since January

Customers have made more than 17,500 advanced payment requests for new electric vehicles.

The United States government has refunded $135 million to car dealers nationwide, the Treasury said this week. This covers the advanced EV tax credit payments made since the start of the year through February 6.

Since January 1, buyers can transfer these credits to the car dealer when purchasing a vehicle, lowering the price by as much as $7,500. Before 2024, the new EV tax credit ($4,000 for used EVs) was only available when buyers filed their tax returns the following year.

According to the Internal Revenue Service (IRS), more than 25,000 time-of-sale reports have been logged, with more than 78% of those filed with advance payment requests. A total of 17,500 new EVs and 2,000 used examples are among the vehicles for which customers have made advanced payment requests.

Treasury says more than 11,000 car dealerships have registered for the program, with more than 8,000 registering to do advanced payments.

To qualify, consumers must meet the income limit requirements for tax credits when purchasing the vehicle. Otherwise, they have to pay the incentive back when filing taxes. The adjusted gross income limit is $300,000 for married couples and $150,000 for individuals. This applies to new vehicles, though.

“One month into [the] implementation of this provision, there is strong demand for this new upfront discount, which will continue [the] momentum in growing this industry in the United States,” said Deputy Treasury Secretary Wally Adeyemo.

Several electric vehicles recently lost their tax credits after the government changed the rules for eligibility. As a result, only a handful of EVs still qualify for the credit, including the Volkswagen ID.4 and Ford F-150 Lightning.

Not everyone is happy about the new tax credit rules. The Alliance for Automotive Innovation has asked the Treasury to relax these regulations in order to speed up the adoption of electric vehicles. The latest battery sourcing rules stipulate that an EV’s battery may not contain materials sourced from foreign entities of concern, including China and Russia. As a result, multiple electric cars have lost out on their incentives, potentially putting off scores of customers.

To counter these changes, General Motors offered customers a $7,500 discount on certain electric vehicles to make up for the fact that they are no longer eligible for the tax credit. However, this will only last for “early 2024,” with GM not stipulating when the deal would end.

It will be interesting to see how much more money the Treasury pays out to dealers in advanced payments for the rest of the year.