Federal and Local Incentives for Plug-in Hybrids and Electric Cars

By · April 02, 2014

Federal Incentives

We're doing our best to track the growing list of federal and state-based incentives for purchasing an electric car or plug-in hybrid. See how much you can save to get behind the wheel of an electric-drive plug-in vehicle. Help us keep the list up-to-date by letting us know if you have info about new or changing incentives.

New Plug-in Car Purchases

Buyers of plug-in hybrids and electric cars benefit from a tax credit of $2,500 to $7,500, depending on the size of the battery in the car. On the low end of the spectrum, cars with 4 kWh battery packs will qualify for a $2,500 tax credit. The credit maxes out at $7,500 for cars with a 16 kWh battery pack, like the Chevy Volt. The credits were provided as part of the American Recovery and Reinvestment Act, otherwise known as the “stimulus bill.” The incentive begins phasing out after an automaker sells 200,000 vehicles that are eligible for the credit.

Better Electricity Rates

Many electric utilities around the country offer special rates, including time-of-use (TOU) rates, to reduce the cost of powering an electric car or plug-in hybrid. The reduced EV rate can significantly reduce the cost of charging your car. Check with your local utility company for exact rates and other details.

Discounts on Insurance

Several major insurance companies, such as Farmers, offer discounts of 5 percent or more for owners of electric and hybrid cars. Inquire with your insurance agent for details. We will continue to investigate which companies offer the best rates for EV owners and will post to this page.

Charging Equipment

EV buyers can claim a credit of 30 percent of the purchase and costs of the charging equipment, up to $1,000 for individuals and $30,000 for businesses. Those rules, which were scheduled to end on December 31, 2011, were extended through 2013.

Conversions

Drivers converting a car into a plug-in hybrid, or a gas-powered car into an electric vehicle, had received a tax credit equal to 10 percent of the conversion cost. But that federal incentive ended on December 31, 2011. Individual states, such as Colorado and Florida, provide additional incentives, such as rebates and state tax credits.

State Incentives

Arizona

Reduced license fees are available for electric cars and some plug-in hybrids. A tax credit of up to $75 is available to individuals for the installation of EV charging outlets in a house constructed by a taxpayer. Carpool lane access is available for pure electric cars.

California

The Clean Vehicle Rebate Project (CVRP) offers rebates for the purchase or lease of qualified vehicles. The rebates offer up to $2,500 for light-duty zero emission and plug-in hybrid vehicles that the California Air Resources Board (ARB) has approved or certified. The rebates are available on a first-come, first-served basis to individuals, business owners, and government entities in California that purchase or lease new eligible vehicles. In periods when funding exceeds current budgets, waiting lists can form. For more information, including a list of eligible vehicles and other requirements, see the CVRP website.

In April 2011, Los Angeles Mayor Antonio Villaraigosa announced a pilot program to provide charging station rebates of up to $2,000. The value of the rebate will depend on the type of charger and equipment installed and is apparently limited to the first 1,000 applicants. To qualify for the rebate, customers must participate in the Los Angeles Department of Water and Power's (LADWP) Residential Time-of-Use Rate, which provides a significant discount for charging your electric vehicle during "off-peak" hours. Residents of L.A. who wish to install a Level 2 charger at their home should, beginning May 1, 2011, visit the LADWP site to apply for available rebates.

Sacramento offers free parking to individuals or small businesses certified by the city's Office of Small Business Development that own or lease EVs with an EV parking pass in designated downtown parking garages and surface lots. Free EV charging is also provided in several parking garages.

In August 2010, the San Francisco Bay Area Air Quality Management District Board of Directors approved $5 million to support electric vehicle charging. The District will not decide the exact amount of the consumer incentive for home chargers until the end of the year, but it will bring the cost down to a couple hundred dollars at the most. The federal government already offers a tax credit equal to 50 percent of the cost to install a home-based charging station—with a maximum credit of $2,000 for each station. Between federal and Bay Area incentives, the cost could be reduced to zero.

An unlimited number of white HOV access stickers will be issued beginning on January 1, 2011 and expire in 2015. That means all plug-in electrics, compressed natural gas vehicles and fuel cell vehicles will be getting the privileges once given to hybrids, and hybrid solo drivers will be forced into the crowded lanes.

Many utilities offer discounted rates for residential vehicle charging during off-peak hours.

The "Remove II Program" is administered by the San Joaquin Valley Air Pollution Control District (APCD) and provides incentives for the purchase of low emission passenger vehicles, light duty trucks, small buses, and trucks with Gross Vehicle Weight Ratings of 14,000 pounds or less. The program offers between $1,000 and $3,000 per vehicle and varies according to the emission certification level and size of the vehicle. Vehicles must be powered by alternative fuel, electric, or hybrid electric motors. The San Joaquin Valley Air Pollution Control District is made up of eight counties in California’s Central Valley: San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings, Tulare and the San Joaquin Valley Air Basin portion of Kern. Rebate vouchers are available for the purchase of electric vehicles in qualifying counties up to $3,000.

In June 2009, Sony Pictures Entertainment established an employee incentive of up to $5,000 when they buy either a hybrid electric vehicle or install solar voltaic panels on their residence.

Colorado

Colorado offers some of the nation’s most generous tax credits for electric cars and plug-in hybrids. The credits are often capped at $6,000. Between 2012 and 2016, the cap on PHEV conversions increases to $7,500.

For details, visit this Colorado-based plug-in car readiness website.

Grants are also available to local governments for the installation of EV charging stations. Grants are prioritized based on the local government's commitment to energy efficiency.

Delaware

Retail electricity customers with one or more grid-integrated electric vehicle (EV) will be credited in kilowatt-hours for energy discharged to the grid from the EV's battery at the same rate that the customer pays to charge the battery. A grid-integrated EV is defined as a battery-powered motor vehicle that has the ability for two-way power flow between the vehicle and the electric grid as well as communications hardware and software that allow for external control of battery charging and discharging. (Reference Senate Bill 153, 2009)

District of Columbia

All vehicles that get least 40 miles per gallon are exempt from the excise tax imposed on an original certificate of title.

Florida

Electric cars are exempt from most insurance surcharges. Electric cars are granted access to carpool lanes.

Georgia

Income tax credits for up to 20 percent of the cost of an electric car—maximum of $5,000—or 10 percent (with a max of $2,500) for a car conversion to use an “alternative fuel” including electricity.

An income tax credit is available to any eligible business enterprise for the purchase or lease of each EV charger that is located in the state. The amount of the credit is 10% of the cost of the charger or $2,500, whichever is less. (Reference Georgia Code 48-7-40.16)

Contact: James Udi, Environmental Specialist, Georgia Environmental Protection Division, james_udi@dnr.state.ga.us.

Hawaii

Qualified plug-in electric vehicles affixed with special state-issued license plates may use HOV lanes regardless of the number of passengers and are exempt from parking fees charged by any non-federal governmental authority. The exemptions are effective through June 30, 2020. Previous rebates have expired.

Illinois

The Illinois Alternate Fuels Rebate Program provides a rebate for 80 percent of the incremental cost of purchasing an alternative fuel vehicle, such as an electric car, up to $4,000. The program also offers 80 percent of the cost of conversions, up to $4,000. For details, contact Darwin Burkhart, Manager, Clean Air Programs, Illinois Environmental Protection Agency and Chicago Area Clean Cities Coalition. darwin.burkhart@illinois.gov; http://www.illinoisgreenfleets.org

Louisiana

The state offers an income tax credit worth 50 percent of the cost premium of an electric car, plug-in hybrid, or converting a vehicle. A taxpayer may instead take a tax credit worth 10% of the cost of the motor vehicle or up to $3,000, whichever is less. Similar credits are available for charging equipment installation. (Reference House Bill 110, 2009, and Louisiana Revised Statutes 47:6035)

Maryland

A tax credit is allowed against the excise tax imposed for the purchase of qualified hybrids and EVs. For qualified EVs, the tax credit may not exceed $2,000. A qualified EV must meet the definition set forth in the Internal Revenue Code. (Reference Maryland Statutes, Transportation Code 13-815)
In May 2010, the state passed law enabling any plug-in electric vehicle to use High Occupancy Vehicle (HOV) lanes regardless of the number of passengers in the vehicle. The excise tax credit and HOV provisions both commence on October 1, 2010, and last for three years.

Montana

A tax credit of $500 is available for an electric car conversion.

New Jersey

Zero-emissions vehicles sold, rented, or leased in New Jersey are exempt from state sales and use tax. This exemption is not applicable to partial zero emission vehicles, including hybrid electric vehicles. ZEVs are defined as vehicles certified as such by the California Air Resources Board. For more information, visit the New Jersey Department of the Treasury website.

Electric cars qualify for access to carpool lane. In addition, the New Jersey Turnpike Authority offers a 10 percent discount on off-peak New Jersey Turnpike and Garden State Parkway toll rates through NJ EZ-Pass for drivers of vehicles that have a fuel economy of 45 miles per gallon or higher and meet the California Super Ultra Low Emission Vehicle standard.

Oklahoma

For tax years beginning before January 1, 2015, Oklahoma provides a one-time income tax credit for 50 percent of the cost of converting a vehicle to operate on an alternative fuel such as electricity, or for 50 percent of the incremental cost of purchasing a new electric-drive vehicle. The state also provides a tax credit for 10 percent of the total vehicle cost, up to $1,500, if the incremental cost of the vehicle cannot be determined. For qualified electric vehicles propelled by electricity only, the credit is based on the full purchase price of the vehicle. For vehicles equipped with an internal combustion engine, such as a hybrid electric vehicle, the credit is based on the portion of the motor vehicle, which is attributable to the propulsion of the vehicle, by electricity. For more information, see Oklahoma Income Tax Form 511CR (PDF 219 KB). (Reference House Bill 1949, 2009, and Oklahoma Statutes 68-2357.22)

Oregon

The Oregon Department of Energy is no longer offering a $1,500 tax credit for the purchase of an electric vehicle. A tax credit, capped at $750, to cover 25% of the cost of purchasing and installing an EV charger, is still available.

For details, contact: Deby Davis, Program Analyst, Oregon Department of Energy, deby.s.davis@state.or.us

South Carolina

A state income tax credit equal to 20 percent of the federal fuel cell, advanced lean burn, hybrid electric vehicle, and alternative fuel vehicle credits is available to South Carolina resident taxpayers who are eligible for, and claim, the federal credits. This credit applies to electric cars and plug-in hybrids.

Tennessee

Plug-in vehicle buyers in Tennessee are eligible rebates of up to $2,500 courtesy of a joint program announced by the Tennessee Department of Economic and Community Development and The EV Project. Only two vehicles—the Chevrolet Volt and the Nissan LEAF—are eligible. Requirements stipulate that only buyers (not lessees) of the first 1,000 Chevy Volts and Nissan LEAFs will qualify.

Utah

The state provides an income tax credit up to $750 for a plug-in vehicle and up to $2,500 for a conversion. For details, contact Mat Carlile, Energy Program Coordinator, Utah Department of Environmental Quality, Division of Air Quality, mcarlile@utah.gov.

Washington

Electric vehicles are exempt from the 6.5 percent sales tax and plug-in hybrids are exempt from the 0.3% motor vehicle sales tax. Tax exemptions also apply to charging station equipment and service. These tax exemptions expire on January 1, 2011.

Canada

British Columbia

B.C. residents will get up to $5,000 off the sticker price of a qualifying clean energy vehicle starting Dec. 1, 2011. The rebate includes qualifying new vehicles that are battery electric, fuel-cell electric, plug-in hybrid electric and those that operate on compressed natural gas. There are about 30 such vehicles for fleets in B.C., and 10 to 20 for residential use. As part of the $17-million program, the province is also providing funding for new charging stations and upgrades to hydrogen fueling stations at existing facilities. Homeowners who want to install a charging station will get a $500 mail-in rebate for eligible units.

Ontario

Ontario rebates ranging from $5,000 to $8,500 to individuals, businesses and organizations that purchase or lease a new plug-in vehicle. The rebates will only be offered to the first 10,000 qualified applicants.

The Hudson Bay Company is offering free valet service for electric cars.

Read next: Eight Factors Related to Total Cost of Ownership of an Electric Car

Comments

· · 2 years ago

Brad, It's worth pointing out that the tax credit in Colorado is refundable, in contrast to the federal one. The link to the information:
http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=applicat...

The credit for a Leaf is $6000, as you suggest. (Assuming that the legislature doesn't do away with the incentives next year... one never knows!) The tax credit is reduced for leased cars, based on the capitalized cost.

· · 2 years ago

I've already taken advantage of the sales tax exemption here in NJ. It's saved me $1,470.00 for my 30 month MINI-E lease as compared to the California lessees. On the ActiveE, I'll save $995.00 as compared to the CA participants. $2,500.00 is a nice savings. I also qualified for the NJ green pass which gives me discounts on just about all road tolls and with all the driving I do, it adds up.

· · 2 years ago

"Washington

Electric vehicles are exempt from the 6.5 percent sales tax and plug-in hybrids are exempt from the 0.3% motor vehicle sales tax. Tax exemptions also apply to charging station equipment and service. These tax exemptions expire on January 1, 2011."

The expiration is now extended to July 1, 2015.

Here is the document that Nissan maintains explaining the incentives.

www.nissanusa.com/ev/media/pdf/incentives/nissan-leaf-incentive-54.pdf

· Mike I (not verified) · 2 years ago

I don't know if this is on anyone's radar, but my tax accountant told me that in 2012 the solar and EV tax credits will not offset AMT. This means that if you currently pay tax based on AMT, not conventional tax calculation, you will not get any benefit from the federal EV/Plug-In tax credit. Also, if the gap between your conventional tax and calculated AMT is small, you will only get the benefit of the tax credit to the extent that your conventional tax is greater than your AMT. This has happened before and congress has extended the tax credits to offset AMT in prior years. However, I haven't heard anything about them extending it for 2012.

· · 2 years ago

Hey Brad, thanks for putting together this listing of incentives. One correction, the Clean Vehicle Rebate Project (CVRP), funded by the California Air Resources Board (ARB), provides rebates of up to $2,500 for battery electric vehicles and $1,500 for plug-in hybrid electric vehicles. This year, the CVRP was funded with an allocation of $15 million and currently the project has approximately $9 million left. I should note that the project is funded on a year to year basis, and we expect it to continue until 2015.

To learn more about available funding or on how to access a rebate, please visit the website www.energycenter.org/cvrp.

· · 2 years ago

Brad, I am surprised to hear the Indiana incentives are gone, but you appear to be correct. But there are some incentives you have missed. Here is one from Think's US website:

"For consumers in ZEV States (CA, CT, ME, MD, MA, NJ, NM, NY, OR, PA, RI, VT) Think offers a $4,000 incentive"

I bought mine from NC, so this did not apply hence I never tried to figure out how it is funded.

Here is the source:
http://www.thinkev-usa.com/buy-think-city/

· · 2 years ago

Brad, I am surprised to hear the Indiana incentives are gone, but you appear to be correct. But there are some incentives you have missed. Here is one from Think's US website:

"For consumers in ZEV States (CA, CT, ME, MD, MA, NJ, NM, NY, OR, PA, RI, VT) Think offers a $4,000 incentive"

I bought mine from NC, so this did not apply hence I never tried to figure out how it is funded.

Here is the source:
http://www.thinkev-usa.com/buy-think-city/

· Annie (not verified) · 2 years ago

Wow, I didn't realize all of these business tax incentives for owning hybrid and electric cars! My company will be in the market for a new car in the next year or so. I may talk to them about the tax incentives that they might receive if they go this route. Thank you so much for the info. Hopefully this list continues to grow.

· · 49 weeks ago

Ugh, NY State has essentially nothing, but plenty of taxes that I still get to pay.

· · 44 weeks ago

Illinois also offers 50% rebate on EVSE equipment purchase and installation, as well as discounted vehicle registration- $36 for a 2-year cycle, vs $101 per year for standard vehicle registration.

· · 38 weeks ago

I don't see anything up here for Texas. According to the Nissan website my state offers this:

ELECTRIC VEHICLE CHARGER REBATE: AUSTIN
Rebate of 50% of the actual cost of Level II EV charger and installation, up to a maximum of $1,500.

· · 14 weeks ago

The tax forms mentioned for Oklahoma only list natural gas-powered vehicles as qualifying vehicles, not electric vehicles.

New to EVs? Start here

  1. What Is An Electric Car?
    Before we get going, let's establish basic definitions.
  2. A Quick Guide to Plug-in Hybrids
    Some plug-in cars have back-up engines to extend driving range.
  3. Electric Cars Pros and Cons
    EVs are a great solution for most people. But not everybody.
  4. Seven Things To Know About Buying a Plug-In Car
    A few simple tips before you visit the dealership.
  5. Federal and Local Incentives for Plug-in Hybrids and Electric Cars
    Take advantage of credits and rebates to reduce EV costs.
  6. Eight Factors Determining Total Cost of Ownership of an Electric Car
    EVs get bad rap as expensive. Until you look at TCO.
  7. Quick Guide to Buying Your First Home EV Charger
    You'll want a home charger. Here's how to buy the right one.
  8. Electric Car Utility Rate Plans: Top Five Rules
    With the right utility plan, electric fuel can be dirt cheap.
  9. The Ultimate Guide to Electric Car Charging Networks
    If you plan to charge in public, you'll want to sign up for charging network membership (or two).
  10. Eight Rules of Electric Vehicle Charging Etiquette
    Thou shalt charge only when necessary. And other rules to live by.