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Federal EV Tax Credit Phase Out Tracker By Automaker | EVAdoption

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FEDERAL EV TAX CREDIT PHASE OUT TRACKER BY AUTOMAKER
Consumers, analysts, electric vehicle advocates, lawmakers and others are all curious about what will happen to the growth in EV sales when the US Federal EV tax credit phases out partially or completely for some automakers. Tesla reached the milestone in July 2018 and General Motors reached it in December 2018.

EVAdoption will update our Federal EV tax credit phase-out tracker a few times per year, so check back on a regular basis. We are currently updating sales estimates through December 31, 2021 for the automakers.

Based on our recent estimates and forecast, Toyota will be the next manufacturer to reach the 200,000 tax credit phaseout threshold, likely in Q1 of 2022. Ford is most likely to quickly follow Toyota and reach 200,000 sales of EVs in Q3 2022, followed by Nissan, but not until at least Q2 or Q3 of 2023.

Manufacturer*	Total Sales 2010 - June 2020	Total Sales 2010 - Dec 31, 2021	# To Reach 200,000
Tesla	605,373	1,090,134	-890,134
General Motors	234,523	271,718	-71,718
Nissan	144,913	164,252	35,748
Toyota Motor Corporation	127,593	192,342	7,658
Ford Motor Company	123,030	160,580	39,420
BMW	99,481	136,690	63,310
Stellantis	46,978	83,893	116,107
Honda Motors	36,852	41,293	158,787
Mercedes-Benz	27,881	25,064	174,396
Kia	20,003		179,997
Volkswagen	18,277	35,395	164,605
Audi	18,466		181,534
Hyundai	15,593		184,407
Porsche	15,341		184,659
Volvo	14,242		185,758
Mitsubishi	9,815	13,397	186,603
Jaguar	4,033	5,661	194,339
Subaru	1,660	5,120	194,880
Land Rover	250		199,750
Rivian		920	199,080
Lucid Motors		577	199,483
Mazda		181	199,919

Notes: *As defined by IRS. BMW includes Mini; Stellantis includes Chrysler Jeep and Fiat; Mercedes-Benz includes smart; and Toyota will include Lexus (which only offered an EV beginning in 2022 | Auto sales data: InsideEVs Monthly Plug-in Sales Scorecard; Wikipedia; GoodCarBadCar; IRS; EVAdoption estimates | GM, Nissan, Toyota, and Mitsubishi are the only automakers that publicly report sales of their individual EV models. BMW, Ford, and Nissan are the only 3 OEMs that publicly report their total EV (BEV & PHEV) sales to the IRS. As a result, total sales for all other automakers are estimates. | Research & Chart: Loren McDonald / EVAdoption.com

Additional Articles and Resources on the Tax Credits:

• Federal EV Tax Credit Phase Out Tracker By Automaker
• Huge Flaws in Federal EV Tax Credit Will Hurt US Automakers Beginning in 2020
• Edmunds: “Elimination of federal tax credits likely to kill U.S. EV market” (wrong)
  How The Federal Electric Vehicle (EV) Tax Credit Works
• Edmunds – Electric Vehicle Tax Credits: What You Need to Know
• Federal and State Laws and Incentives
• IRS Form 8936 (Form required to file with your tax return)
• IRS: IRC 30D – Plug-In Electric Drive Motor Vehicle Credit Quarterly Sale

 

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as a reminder from How The Federal Electric Vehicle (EV) Tax Credit Works – EVAdoption
HOW THE FEDERAL ELECTRIC VEHICLE (EV) TAX CREDIT WORKS
Battery electric and plug-in hybrid vehicles purchased in or after 2010 may be eligible for the US federal income tax credit of up to $7,500. The credit amount varies based on the capacity of the battery used to power the vehicle. All current Tesla models are (and the Model 3 will be) eligible for the initial full $7,500 credit. The Chevrolet Volt PHEV also qualifies for the full $7,500, for example, whereas the Ford Fusion Energi, is only eligible for a $4,007 credit.


See how the IRS calculates the available tax credit for each EV model.

The federal tax credit is phased out over time beginning the second quarter AFTER the quarter in which a manufacturer reaches a total of 200,000 BEV or PHEV vehicles sold since 2010. Here is how the phase out works:

• The full amount of the EV qualifying tax credit is in place DURING the entire calendar quarter in which 200,000 EVs are sold by a manufacturer, AND through the subsequent quarter.
• Then the tax credit amount is reduced by 50% for the next 2 quarters.
• The credit is reduced again to 25% of the original amount for the subsequent 2 quarters.
• At that point the credit expires completely.

Can You Actually Claim the Credit?
There are a few things to keep in mind when considering the purchase of an EV and qualification for the tax credit:

1. First, you must purchase, not lease the vehicle to be directly eligible for the tax credit. If the vehicle is leased, only the lessor and not the lessee, is entitled to the credit. However, the leasing company should pass on the federal credit to the lessor in the form of lower monthly lease payments.
2. Secondly the tax credit only applies to new cars, not used.
3. To claim the credit, you must have a tax liability that you report on your Federal tax return. You can only claim the credit up to the amount of your tax liability.

Additional Resources on the Tax Credits:

• Edmunds – Electric Vehicle Tax Credits: What You Need to Know
• IRS Form 8936 (Form required to file with your tax return)
• Federal and State Laws and Incentives
• IRS: IRC 30D – Plug-In Electric Drive Motor Vehicle Credit Quarterly Sales
• How The Federal EV Tax Credit Amount is Calculated for Each EV