How Clean Energy Incentives Helped Launch an Electric Vehicle Revolution

The allure of having an electric vehicle, that is both green and saves you money, is hard to resist. Sales of electric vehicles in 2018 reflect that consumers have woken up to the benefits of electric cars - with sales increasing dramatically from the year before. Aiding that increase has been a combination of Tax Credits, rebates, and other incentives that have made buying an electric vehicle - and installing solar to power it - within reach of a much larger segment of people. Let’s take a look at how the EV market grew in 2018 - and how incentives helped with that increase. The Top Selling Electric Cars in 2018 2018 was an amazing year for electric car sales. In the US, EV sales for 2018 came in at 361,307, up 81% from 2017. This sharp increase surprised both EV experts and investors alike, but proved both that the Tax Credits for EV’s are working, and that consumers are enthusiastic for adoption. US car buyers are clearly excited about going green and saving money by switching to electric.  Between the Model 3, the Model S, and the Model X, Tesla EV sales made up over 50% of total EV sales in 2018. Other big players were the Toyota Prius Prime, the Honda Clarity, as well as the Chevy Volt and Bolt. As these EV’s are becoming both more affordable and more efficient, it’s clear that the price tag is a big determining factor for adoption. Combine those price decreases with the incentives and rebates available - and it’s clear to see why the adoption spiked in 2018.EV Tax Credits and Rebates as Incentives to Buy Though there were some EV models released in 2018 that had significantly reduced price tags from the years before, and that likely contributed to the increase in sales, we still cannot ignore the fact that in 2018 there were substantial Tax Credits and rebates on EV’s that aided in sales as well. Between the Federal EV Tax Credit and the California Clean Vehicle Rebate Project, there was plenty of money available to those who purchased an EV in 2018. To ignore those savings was clearly too hard for many people who were on the fence about buying, as the numbers show. Let’s look at some of those credits and rebates to see just how convincing they were.  The Federal EV Tax Credit  A large part of the reason EV’s sold so well last year is that there were significant Federal Tax Credits available to buyers. The way the Federal EV Tax Credit works is that any plug-in or hybrid electric cars purchased after 2010 are eligible for a Tax Credit of up to $7,500. The credit amount is determined by the capacity of the battery of the vehicle, as well as how many have sold. To find out how much is available for each model, you can visit the official FuelEconomy.gov website. Tax Credit Phase Out’s Per Model Most EV models start with a potential $2,500 to $7,500 credit, then once the manufacturer reaches 200,000 models sold, the credits’ for models from that manufacturer have a phase out period where the amount of credit is halved every financial quarter, following the limit being reached. So for example General Motors, maker of the popular Chevy Bolt and Volt, reached its 200,000 sales mark in Q4 of 2018. So in 2019, the Tax Credit available for GM electric vehicles has been reducing each quarter, from $7,500 in the first, to $3,750 this quarter, and will go down to $1,875 starting on 9/30/2019 - until it completely phases out on 3/31/2020. So, if you’re looking to purchase an electric vehicle, you should know when the Tax Credits phase out for your desired model so that you can get the maximum amount of credit. For many models, there is no end date planned yet because the manufacturer has not yet reached 200,000 sales; but for the popular manufacturers - including Chevy and Tesla -- Tax Credits are already halfway gone. So, it’s best to stay informed on phaseouts to save the most money possible.

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