Michigan’s EV tax credits Driving Savings and Economic Growth
New Incentives Boost EV Sales and Manufacturing
A recent US Treasury report reveals that drivers making the switch from gas-powered vehicles to electric ones are reaping significant savings this year. Thanks to President Joe Biden’s Inflation Reduction Act, federal tax incentives are now available for those purchasing new or used electric vehicles, leading to instant savings at dealerships.
Savings at the Dealership
Under the Inflation Reduction Act, buyers of eligible new electric vehicles or plug-in hybrids can qualify for a tax credit of up to $7,500, while used vehicle buyers can receive up to $4,000 in tax credits. The best part? These credits are no longer claimed on annual tax returns but can be applied upfront at the dealership, reducing the down payment significantly.
Impact on Prices and Market Demand
With an average savings of $6,900 per vehicle sold in the US, the federal tax credits have amounted to a collective savings of $600 million so far this year. As prices for electric vehicles continue to drop, drivers are now paying only about $5,000 more for an electric car compared to gas-powered models, making them a more attractive option.
Long-Term Savings for Michigan Drivers
Michigan drivers can save over $20,000 in a 10-year period by choosing an electric vehicle over a gas-powered one. The state is quickly becoming a major player in clean energy manufacturing, attracting numerous big-name projects related to EVs and battery manufacturing.
Qualifying for tax credits
Dozens of new and used electric vehicles qualify for federal tax credits based on various factors, including the vehicle’s price, battery components, and assembly location. To be eligible, buyers must purchase the vehicle for personal use, and their adjusted gross income must not exceed specified thresholds.
Driving clean energy Industry Growth
The Biden administration introduced these incentives to spur the development of a clean vehicle industry and reduce the country’s dependence on fossil fuels. The strategy has proven successful, with record-breaking sales of clean energy vehicles in the US and a significant increase in EV sales from the previous year.
Moving Towards a Cleaner Future
As consumer demand for EVs continues to rise, Michigan is witnessing a surge in clean energy projects and manufacturing facilities. The state’s transition to cleaner energy is attracting substantial investments and creating thousands of new jobs, positioning Michigan as a leader in electric vehicle battery manufacturing.
Future Savings for Michigan Drivers
Michigan drivers may soon benefit from additional savings through a proposed state tax rebate, offering up to $2,500 in rebates for electric vehicle purchases. When combined with the federal tax credit, drivers could save up to $10,000 off the cost of a new electric vehicle in Michigan.
State Budget Proposal
Gov. Gretchen Whitmer has proposed a $25 million rebate program in the state budget to support these incentives, awaiting approval from state lawmakers. The program aims to further encourage the adoption of electric vehicles and fuel the state’s growing clean energy industry.