IRS Boosts EV Adoption with Point-of-Sale Tax Credits
The IRS has launched educational initiatives to boost awareness of tax credits for electric vehicles (EVs), aiming to increase registrations and spur adoption. Consumers can now use these credits at the point of sale, reducing upfront vehicle prices.
From January 1 to February 6, the U.S. Treasury Department reimbursed car dealers approximately $135 million for advanced payments made to consumers using the clean vehicle tax credits at the time of purchase. Dealers have submitted over 25,000 time-of-sale reports, with 78% including a request for advance payment.
Initially, 35 model year 2024 EVs were eligible for the credits, but this number dropped to 14 at the start of the year. Most Volkswagen ID.4 models regained eligibility last month, increasing the count to 20. General Motors has also stepped in, offering additional financial incentives of up to $7,500 for EVs that lost federal credit eligibility.
More than 8,000 of the 11,000 registered dealers have received advance payments, indicating a positive response to the new program. The IRS's educational initiatives and the ability to use tax credits at the point of sale are expected to further drive EV adoption and support the growing market.
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