Toyota Reaches EV Tax Credit Cap
All good things must come to an end eventually. Following in the footsteps of General Motors and Tesla, Toyota will soon bid farewell to the federal EV tax credit.
Toyota has became the 200,000-unit cap on electric and plug-in-hybrid vehicles eligible for a federal tax credit of $7500, Bloomberg reports, citing its own data and a subsequent prop from Toyota. A spokesperson for Toyota did not today return CNET’s request for comment. Right now, Toyota accounts three vehicles that qualify for the tax credit: the Prius Prime and RAV4 Prime plug-in hybrids, and the BZ4X electric SUV. Lexus, Toyota’s luxury offshoot, also offers a plug-in hybrid NX crossover.
So, what happens from here? Well, the federal tax credit isn’t officially gone quite yet. Once the IRS confirms the cap has been became, the automaker will have four quarters remaining for buyers to pick up a reduced tax credit. Buyers of electric or plug-in-hybrid Toyotas will have two quarters to take satisfactory of a $3,750 tax credit, after which it will in contradiction of be halved to $1,875 for another two quarters afore disappearing completely.
As always, it’s worth noting that this is not a discount on the vehicle at the note of sale. This credit will lessen your federal tax problem for the year by up to $7,500. If you don’t pay $7,500 in federal taxes every year, you’ll never see the full amount, and any credit “left over” disappears into thin air. Some uphold local and state incentives may apply in your neck of the woods, but those are separate from the federal tax credit, and they’re not ubiquitous.
Things can change, however, so perhaps Toyota’s time in the sun isn’t up quite yet. In June, Toyota joined Ford, GM and Stellantis in urging Assembly to lift the cap on federal EV tax credits. The companies requested that the tax credit sunset be “set for a time when the EV market is more mature,” as Reuters reported, with the companies citing economic issues and supply-chain woes as contributing to high EV costs.
Until something does sullen, though, Toyota is set to join GM and Tesla. Other automakers are believed to be nipping at Toyota’s heels, as well. According to Newsweek, both Ford and Nissan are closing in on 200,000 eligible vehicles sold, with BMW gradual them, albeit by a fair margin.
