All You Need to Know About Federal Incentives for EV Charging Stations

Shopping for an electric vehicle (EV)? Some may be more expensive than gasoline-powered cars, and you’d need to charge their batteries when not in use. But there are state and federal EV charging incentives to help defray those costs, and even save you money in the long term.

Maintenance costs are for electric vehicles are 40% lower than a gas-powered vehicles.

According to AutoNews, your maintenance costs would be 40% lower for an electric vehicle (EV) than a gas-powered vehicle of similar size over eight years or 100,000 miles. Plus, research done by the National Renewable Energy Laboratory shows that you could save between $3,000 and $10,500 in lifetime fueling costs with an EV over a gas-powered vehicle (NREL, 2020).


In this article, we’ll explore these incentives and other considerations such as setting up a charger at home, battery capacity, charging time, hardware, and installation costs.

Federal EV Charging Incentives in 2021

In many cases, you could get a tax credit of up to $7,500 to buy a new qualified plug-in EV.


The plug-in EV credit (IRC 30D) was originally enacted in Section 30D of the Energy Improvement and Extension Act of 2008. It was amended by the American Recovery and Reinvestment Act of 2009 effective for vehicles acquired after December 31, 2009.

How much is the EV tax credit?


This credit starts at a minimum of $2,500 and is capped at a maximum of $7,500. The credit amount is calculated for each make and model-based solely on their battery capacity, which is used to estimate the EV’s range on a full charge (My EV, 2019).


According to EV Adoption, the IRS uses the size of the battery pack to calculate the EV tax credit, as long as the battery capacity is at least 5 kilowatt-hours (kWh). They start with $2,500 for a minimum of a 5 kWh battery pack, plus $417 for all battery packs. Then here’s the important part: they add $417 for every kWh of battery capacity in excess of 5 kWh.


If, for example, you buy an EV with a 10 kWh battery pack, the IRS will give you a tax credit of $5,002:

Breakdown of a tax credit scenario for an EV with a 10 kWh battery.

Which manufacturers produce qualified EVs?

It is easy to check whether an EV qualifies for a tax credit and for how much. You can check the IRS list with federal EV charging incentives for the exact credit amounts.


You could also reference another list from Edmunds which shows the credits for both EVs and plug-in hybrids.


Here are a few examples:

  • With a large battery of 33.5 kWh, a Ford Focus Electric manufactured between 2012 and 2018 gets you a full credit of $7,500.
  • A Subaru Crosstrek Hybrid with an 8.8 kWh battery produced after 2019 gets you a credit of $4,502.
  • With a smaller battery size of 7.1 kWh, a BMW i8 manufactured between 2014 to 2017 gets you a credit of $3,793.

Read the fine print before you buy an EV

As with any tax incentive, there are conditions you need to meet before you are eligible to receive the credit. The EV must be:

  • Acquired after December 31, 2009.
  • Owned or leased by the taxpayer and not used for resale.
  • Used primarily by the taxpayer.
  • Used predominantly in the United States.
  • Have batteries rated at least 4KWh of energy storage capacity.
  • Capable of being recharged from an external source.

These tax credits will eventually be phased out if a manufacturer has already sold a minimum of 200,000 qualified plug-in EVs for use in the United States.

Tesla and GM have sold 200,000 each, thus are no more tax credits for EVs produced by these manufacturers. Be sure to double-check with the specific manufacturer before you buy, or check the phase-out tracker by EVAdoption.


For more information, read the IRS Pub 8911. If you are looking to receive the tax credit, download the 8911 form to file your tax return.

Federal EV Tax Credits for Charging Stations


Not only do you get a tax credit when buying or leasing an EV, but you also get tax incentives for purchasing and installing an EV charging station at your home or business. These federal EV charging incentives can help offset the cost of hardware as well as installation costs, including labor charges.


For more details, check out our article on tax incentives associated with purchasing and installing EV charging stations.

Examples of Incentives Per State

Are there any state tax credits you can also take advantage of?

Yes, but many of these apply only to businesses. Some state incentives come as exemptions from fees or inspections, while others are nonmonetary incentives like free parking or carpool lane access.

Here are a few examples:

California

The Clean Vehicle Rebate Program provides up to $7,000 to each California resident if they buy or lease a new, eligible zero-emission battery-powered EV, or plug-in hybrid light-duty vehicle, or a fuel-cell EV. Similar to the federal incentive program, different vehicles have different rebate amounts.

Current funding is nearly exhausted in 2021. Once these rebate funds are exhausted, additional applications will be placed on a waiting list.


Colorado

The state has its own set of state incentives with different amounts for light vs. heavy-duty, owned vs. leased EVs. Residents can get a $2,000 credit for leasing a light-duty EV, or $4,000 for purchasing it outright (Alternative Fuels Data Center, 2021).


New York

State EV incentives in New York are similar to those of California but much smaller, capped at only $2,000. However, they have thousands of charging stations throughout the state, and PEVs are eligible for HOV lane access with a 10% discount on EZ tag toll road fees (NYSERDA, 2021).

Useful maps of State Incentives

A neat tool you can use to find the state incentives you’re eligible for based on your state or zip code is available at the Plug In America website.


You could click on your state for an overview of the available incentives, or continue to PlugStar, enter your zip code to pull up the incentives available to you based on where you live.


Another tool at the Alternative Fuels Data Center allows you to sort incentives by state and type. There, you will find incentives not just for EV, but also fuel cell vehicles, hybrid vehicles, along with other rebates and exemptions.

Here are a few ways you can take advantage of these credits and start saving money.

How do I get started with installing an EV charging station and get the tax credit?

You can either install it at your place of residence or at your office, using a qualified and compliant service provider. To learn more about installing an EV charging station, use the 365 Pronto platform to get direct access to a network of local, compliant, and certified service providers.

What if I already have an EV charger installed?

You can reduce your maintenance costs and headaches by becoming a Pronto customer and create a corresponding work order. If you want a platform demo before trying us out, contact our 365 Pronto Team and request one.

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