Electric Car and Plug-In Hybrid Incentives in the USA – A Quick Guide

According to an estimate of the U.S. Energy Information Administration, two-thirds of all the oil consumed in this country is used for transportation.

The analysis also announced that almost 93% of the fuel used for transportation comes from petroleum. Many U.S. states are working on several incentive schemes to favor the use of alternative fuels and reduce the country’s dependency on oil.

It all began in 2011, when President Barack Obama’s administration pledged $2.4 billion in federal grants to support the development of the next-generation electric vehicles and batteries.

The idea was to make the United States of America the first country to have one million electric vehicles on the road by 2015.

These grants were for manufacturers and developers of these vehicles, while customers got different benefits depending on the state they resided in.

These advantages first came in 2008 and 2009, with two acts on clean energy that granted tax credits for new qualified plug-in electric motor vehicles. At the time, another law authorized federal tax credits for converted plug-ins, but the benefits are now focused on cars that were electric or plug-in hybrids when they left the factory, and are only given to the first owner.

Tax credits were available to those who fitted charging equipment at their homes and businesses. Other incentives were provided to energy suppliers who offered lower rates at specific intervals for customers who owned electric cars.

All of these incentives should have made people queue up in front of dealerships that sold electric vehicles and plug-in hybrids, but this was not the case. Sure, some models were more popular than others, but sales of low and zero tailpipe emission vehicles did not soar as hoped. Some states offered incentives for a while and then stopped, while others keep providing facilities even today.

We have prepared a quick guide of incentives for electric vehicles and plug-in hybrid cars in the United States of America. It is important to note that some of the mentioned benefits are limited to a total dollar amount that can be dispersed or will expire on a certain date, but we tried only to include the benefits that should still be available in 2016. Purchase and insurance incentive
US citizens that bought a new plug-in hybrid or electric car with a battery pack of minimum 4 kWh are eligible for a tax credit of $2,500 to $7,500. Clients of cars with bigger capacity batteries receive the maximum value. Once a carmaker sold 200,000 vehicles eligible for the credit, the incentive begins phasing out.

Insurance companies also provide discounts to owners of electric and hybrid cars. These cuts have been introduced because Eco-conscious customers tend to be safer drivers. The total discount varies from case to case, but it is usually about five percent or more of the total insurance premium.Charging equipment and electricity rates
Since plug-in vehicle owners need to charge their cars from an outlet, they require lower electricity rates to make the process affordable. Exact rates differ from one utility company to another, but special rates are provided for owners of electric and plug-in hybrid cars, including time-of-use rates. The latter usually refers to night charging, when electricity prices are lower.

The Consolidated Appropriations Act of 2016 allows Americans to receive a tax credit of 30 percent, up to $30,000, for fueling equipment and related infrastructure for electricity. Residential users can get a tax credit of up to $1,000. State Incentives
Below, you can find the benefits provided by individual states, arranged alphabetically. We made this list using information from plugincars.

Residents of Arizona benefit from reduced license fees for electric cars and a selection of plug-in hybrid vehicles. Furthermore, Arizonians can get a tax credit of up to $75 for the installation of an EV charging outlet in a house. Pure electric vehicles get carpool lane access.

In California, there are rebates of up to $2,500 for light-duty zero emission and plug-in hybrid vehicles which are approved or certified by the California Air Resources Board, and only come to new vehicles. Certain areas of the state offer various facilities for EV and PHEV drivers, like free parking, free EV charging, HOV access stickers, and much more.

Some companies in California also provide employee incentives for the private acquisition of an electric car or a hybrid vehicle, or even for solar panel installation. California seems to be the most generous state in this concern.

Another generous state is Colorado, in which buyers of new electric cars of PHEVs get a tax credit of up to $6,000, the largest in the country. There are also grants for the installation of EV charging stations, but these refer to local governments.

In Connecticut, metered parking is free for hybrids and EVs, and there is a rebate of up to $3,000 for the purchase of a new EV, FCV, or PHEV. Individuals can only get one rebate, but businesses and other entities can get two rebates. However, the incentive program is on a first come, first served basis, and will end once the budget is terminated.

If you live in Delaware, you can get a rebate of $2,200 for the purchase or lease of a new electric vehicle, or up to $1,100 for the retrofit of an electric drive system instead of an internal combustion engine. The purchase of electric vehicle charging equipment can provide clients with a rebate of up to $500.

In the District of Columbia, customers of plug-in vehicles have a reduced registration fee of $36, and are exempt from the excise tax on an original certificate of title.

Florida residents who purchase an EV get access to carpool lanes and are exempt from most insurance surcharges. Some utility companies offer rebates for purchasing or leasing plug-in vehicles, depending on battery capacity.

If you live in Hawaii and drive a qualified plug-in electric vehicle, you get individual state-issued license plates that allow HOV access and free parking, the latter being available in any non-federal governmental authority. There is also free parking at the Honolulu Airport, where there is also a charging station for EVs. The latter is not free of charge.

Louisiana residents who buy an electric car, PHEV, or convert a conventional vehicle to electric power get to choose between a tax credit worth 10% of the cost of the motor vehicle, or up to $3,000, whichever is less. The installation of charging equipment is also eligible for similar credits.

In Maryland, depending on battery capacity and funding, a customer can receive credits of up to $3,000. Th
ere is also a rebate on installing EV charging systems, which goes up to $900 for individuals and up to $5,000 for businesses. There are other benefits in this state, like a one-time excise tax credit of up to $1,000, as well as access to HOV lanes – upon request.

In Massachusetts, rebates go up to $2,500 for the purchase or 36-month lease of a new electric vehicle, plug-in hybrid, zero-emission motorcycle, and FCV.

Montana residents who convert a conventional car to electric power can get a tax credit of $500. Meanwhile, in New Jersey, all zero-emissions vehicles that are sold, leased, or rented are exempt from state sales and use tax. This does not apply for PHEVs.

However, electric cars get to access to the carpool lane, and cars that have a fuel economy of over 45 MPG and meet the California Super ULEV standard get a 10% toll discount on off-peak rates on the New Jersey Turnpike and Garden State Parkway through the EZ-Pass system.

Any Cincinnati resident that drives an EV gets free parking at any meter in the City and the two city-owned parking garages. The benefits end here for Ohio residents. In Oregon, there is a tax credit of $750 that covers 25% of the cost of purchase and installation of an EV charger.

Pennsylvania residents who buy an electric car or PHEV can get a rebate of up to $2,000 upon purchase of a vehicle with less than 500 miles. The offer is limited to the first 500 applicants, though, and it may have ended by now.

In Rhode Island, residents can get up to $2,500 in rebates from the lease or purchase of a new EV. The town of Warren in the same state provides a tax exemption and reduced registration for residents that buy plug-in cars, but only up to $100.

South Carolina provides a state income tax credit of 20% for the purchase of FCV, EV, PHEV, advanced lean burn, hybrid and alternative fuel vehicle. In Texas, the purchase or lease of an EV or Plug-In Hybrid provides an incentive of up to $2,500. Austin residents benefit from a rebate of up to $1,500 for EV charging equipment, while the people of San Antonio who buy an EV get free metered parking.

In Utah, you can get an income tax credit of up to $750 for a plug-in vehicle, or up to $2,500 if you convert a conventional car to run on electric power alone.

Deductions can be claimed immediately after acquisition, while tax credits are claimed when filing income taxes. For more information, enter the website of your local administration before buying an electric or PHEV to find out which gets more benefits.

We must note that the eligibility for income tax credits depends on individual tax situation.