Federal Incentives for Electric and Hybrid Vehicles

The growing interest in electric and hybrid vehicles is fueled by a combination of environmental concerns and financial incentives. To the prospective buyers, understanding the incentives that are available for them can greatly influence their decision. It is recommended that action should be taken promptly since incentive programs as well as regulations are subject to change. This guide provides a comprehensive overview of the current federal and state incentives and considerations for purchasing these vehicles.

Federal Incentives for Electric and Hybrid Vehicles

The federal government offers several incentives for new, pre-owned, and hybrid electric vehicles.

New Clean Vehicles

If you buy a new, qualified electric vehicle (EV) or fuel cell electric vehicle (FCV) in 2023 or after, you may qualify for a clean vehicle tax credit up to $7,500. The credit amount depends on when you take delivery of the vehicle. For vehicles delivered between January 1 to April 17, 2023, the credit can be up to $7,500. For vehicles delivered on or after April 18, 2023, the vehicle must meet new critical mineral and battery component requirements to qualify for the credit. The credit can be up to $3,700 if the vehicle meets either the critical minerals requirement or the battery components requirement, and up to $7,500 if the vehicle meets both.

Hybrid Vehicles

For 2024, the list of qualified vehicles only includes fully electric vehicles and a small selection of plug-in hybrids. Traditional “parallel” hybrids like the standard Toyota Prius or Honda CR-V Hybrid won’t qualify for the rebate. The vehicle and battery pack of qualified EVs and PHEVs must be assembled in North America. Additionally, a percentage of the battery’s key materials must be sourced from the U.S. or countries that hold free-trade agreements with the U.S.

Pre-owned Vehicles

Pre-owned all-electric, plug-in hybrid, and fuel cell electric vehicles purchased on or after January 1, 2023, may be eligible for a federal income tax credit. The credit equals 30% percent of the sale price up to a maximum credit of $4,000.

State Incentives for Electric and Hybrid Vehicles in Pennsylvania and New Jersey

Pennsylvania Incentives

If you buy a new electric or plug-in hybrid vehicle in Pennsylvania, you could receive a $2,000 rebate for battery electric cars and trucks, and a $1,500 rebate for plug-in hybrid cars and trucks. Low-income couples may qualify for an additional $3,000 rebate, and low-income singles may receive an additional $1,000 rebate. Used cars must have less than 75,000 miles and a final purchase price of $50,000 or less to be eligible for these incentives.

New Jersey Incentives

New Jersey offers up to $4,000 when you purchase a new electric car. You can also receive a rebate of up to $250 when you purchase an eligible electric vehicle charger for your home. The state also provides funding for home charging stations and does not charge state sales tax on zero-emission vehicles.

Installing Home Charging Stations in Pennsylvania and New Jersey

Installing a home charging station for your electric vehicle offers several benefits, including convenience, cost savings, and increased property value. However, there are several factors to consider, such as cost, maintenance, regulations and permits, and electrical capacity. It’s also important to follow safety standards during installation and to hire a licensed electrician if installing a Level 2 or Level 3 charger. Check if your utility company offers incentives and discuss with neighbors if you live in a community.

  • New Clean Vehicles:
    • If you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV) in 2023 or after, you may qualify for a clean vehicle tax credit up to $7,500.
      • The credit amount depends on when you take delivery of the vehicle.
    • For vehicles delivered on or after April 18, 2023, the vehicle must meet new critical mineral and battery component requirements to qualify for the credit.
    • The credit can be up to $3,700 if the vehicle meets either the critical minerals requirement or the battery components requirement, and up to $7,500 if the vehicle meets both.
  • Hybrid Vehicles:
    • For 2024, the list of qualified vehicles only includes fully electric vehicles and a small selection of plug-in hybrids.
    • Traditional “parallel” hybrids like the standard Toyota Prius or Honda CR-V Hybrid won’t qualify for the rebate.
    • The vehicle and battery pack of qualified EVs and PHEVs must be assembled in North America.
    • Additionally, a percentage of the battery’s key materials must be sourced from the U.S. or countries that hold free-trade agreements with the U.S.
    • **Important note, if someone purchases a hybrid vehicle that person may receive the credit. If someone leases a hybrid vehicle, the car company receives the credit but the buyer would get a lower lease payment.
  • Pre-owned Vehicles:
    • Pre-owned all-electric, plug-in hybrid, and fuel cell electric vehicles purchased on or after January 1, 2023, may be eligible for a federal income tax credit.
    • The credit equals 30% percent of the sale price up to a maximum credit of $4,000.

Incentives for Electric and Hybrid Vehicles in PA and NJ:

  1. PA Incentives:
    • Cash Rebate: If you buy a new electric or plug-in hybrid vehicle in Pennsylvania, you could receive:
      • Battery electric cars and trucks qualify for a $2,000
      • Plug-in hybrid cars and trucks qualify for $1,500
    • Income-Based Bonus:
      • Low-income couples may qualify for an additional $3,000 (Household Income less than $35,000)
      • Low-income singles may receive an additional $1,000
    • Used Cars Eligibility:
      • Must have less than 75,000 miles to be eligible for these incentives.
      • Final purchase price of $45,000 or less.

2. NJ Incentives:

    • Rebates:
      • New Jersey offers up to $4,000 when you purchase a new electric car.
      • Receive a rebate of up to $250 when you purchase an eligible electric vehicle charger for your home.
    • Charging Grants: They also provide funding for home charging stations.
    • Tax Exemption: No state sales tax on zero-emission vehicles.

 

Installing Home Charging Stations: What You Need to Know in PA and NJ

  1. Why Install a Home Charging Station?
    • Convenience: Charge your EV at home overnight—no need to visit public charging stations.
    • Cost Savings: Home charging is often cheaper than using public stations.
    • Property Value: Installing a charging station can enhance your home’s value.
  2. Types of Chargers:
    • Level 1 Charger: Standard Wall Outlet (120 Volt)
      • Speed: Slow (Roughly 5 miles of charge per hour). *Could take 12-14 hours for full charge.
      • Usage: Ideal for overnight charging and for local trips.
      • Benefits: Simple setup. Compatible with most homes. *3 prong outlet.
      • Pitfalls: Slower charging time.
    • Level 2 Charger: 240-Volt Outlet (Dryer Plug)
      • Speed: Faster than Level 1 Charger (Up to 25 miles of range per hour) *Could take 3 hours for full charge.
      • Usage: Common choice for homes. **Many run into their garages or driveways….
      • Benefits: Quicker charging for daily use.
      • Pitfalls: Installation cost.
      • Cost: Installation expenses range from $700 to $2,500, including the charger.
    • Level 3 Charger (DC Fast):
      • Speed: Very fast. Can charge up to 250 miles of range per hour. *Possible full charge in 30 minutes.
      • Usage: Typically used in public stations.
      • Benefits: Rapid charging for emergencies or long trips.
      • Pitfalls: may not be cost effective to be installed at home…..cost to use somewhere….
  3. Things to Consider:
    • Cost: Installation expenses vary.
    • Maintenance: Chargers need occasional care.
    • Regulations and Permits: Check local rules.
    • Electrical Capacity: Ensure your home’s system can handle it. **you may need an additional box/source……
  4. Rules and Benefits:
    • Safety Standards: Follow guidelines during installation.
    • Professional Help: Hire a licensed electrician if installing a Level 2 or Level 3 charger.
    • Utility Programs: Check if your utility company offers incentives.
    • Resident Buy-In: Discuss with neighbors if you live in a community.

 

RTD Financial Advisors, Inc (“RTD”) is a SEC registered investment adviser.  Information presented is for educational purposes only intended for a broad audience.  The information does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed.  RTD has reasonable belief that this marketing does not include any false or material misleading statements or omissions of facts regarding services, investment, or client experience. RTD has reasonable belief that the content as a whole will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. RTD has presented information in a fair and balanced manner. RTD is not giving tax, legal or accounting advice, consult a professional tax or legal representative if needed. 

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