Some California Residents Can Save $13,000 on the Purchase of an EV
August 24, 2012 9:14 AM
comment(s) - last by
Some residents qualify for a local rebate of $3,000
The state pushing the hardest to transition drivers from gasoline-powered vehicles to electric vehicles and hybrids is California. Part of the state’s push to get people to adopt electric vehicles has come by way of tax credits and rebates (which are in addition to rebates available at the federal level).
All of those rebates can be combined making for a significant discount off the purchase price of an electric vehicle. The state of California offers a $2,500 rebate on the purchase of an electric car. The federal tax credit for buying an electric vehicle is $7,500. However, the San Joaquin Valley Air Pollution Control District recently announced that it is offering drivers in the district another $3,000 to purchase an electric vehicle.
When combined the local, state, and federal tax rebates, this represents a total of $13,000 off the price of an EV. To compare, in the state a new gasoline-powered Toyota Corolla has a sticker price of just under $18,000. By comparison, the
electric Mitsubishi iMiEV
has a sticker price of $29,975. That is a huge difference between factory MSRPs for the vehicles, but when you knock off the $13,000 in credits, the purchase price of the Mitsubishi EV is a more palatable $16,975.
Despite the significant discount, most drivers still stay away from electric vehicles. The biggest reason is range anxiety and long charging times. However, electric vehicles can be cheaper to operate. An example would be to drive the gasoline-powered Corolla mentioned before with a travel distance of 40 miles a day with gasoline at $3.95 per gallon would cost the driver $150 a month. Charging the electric car to drive the same distance each day would cost about $50.
President Obama is also seeking to
expand tax credits
for EVs by bumping the federal credit from $7,500 to $10,000, making the price gap even less if approved.
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RE: Credits vs. Deductions
8/24/2012 2:18:06 PM
Yes but on how he worded that response I think people are still confused. I'm guessing (but I could be wrong) people are getting mixed up with what tax liability is.
Your federal tax liability is the amount you pay to the federal government you in a given year and NOT just what you owe at the end of the year (he used owe which to me implies still owes at the time the credit would be processed).
Eg, you could have already paid $7k in taxes for the year but come tax time have an outstanding tax liability of $1k. Thus for the entire year, you've now paid $7k in taxes, but instead of paying that $1k you still owe, because you bought this EV, you get $6500 back instead (7k+1k-7500=liability of $500. 7k-500=refund check).
Some people - especially based on their misunderstanding of how this works above - may think that means you are making money when you get money back.
But thanks for that post hopefully that clears some of this up to people.
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