Toyota Just Ran Out of EV Tax Credits
Now, there are three. “What three are they?” you ask. These three are the companies that have run out of Federal EV Tax Credits. The impacted names are Tesla, GM, and now Toyota. That’s right, Toyota has barely gotten their battery-electric vehicle program off the ground, and can’t offer customers EV tax credits. How could this impact future Toyota electric car sales?
How did Toyota run out of credits before selling true electric cars?
The fires mass-market Toyota EV heads to market, the new bZ4X and no more $7,500 Federal EV tax credits are available for consumers. The strong sales of Toyota plug-in hybrid and traditional hybrid vehicles, which qualified for the tax credits, gobbled up all of the 200,000 credits offered.
A few customers will enjoy the full benefit of a Toyota EV
We’ve set the table of gloom a bit early; the EV tax credits for Toyota aren’t entirely gone yet. At the end of 2021, 183,000 hybrid and PHEV Toyota models qualified for this tax credit. Automotive News informs us that Toyota sold another 8421 qualifying models during the first quarter of 2022. This leaves only a few credits left. Experts predict these will be completely gone by October at the latest.
Will future Toyota electric cars offer tax credits?
Congress has tossed around a new EV tax credit program for months, but nothing has come of it yet. Under the current program, new EV and PHEV models will only qualify for half of the original credit, or $3,750. This amount is only good for six months, at which time the amount is cut in half again to $1,875 for another six months. Once that final time period passes, none of the Toyota EV models will qualify for a federal tax credit.
Which company will run out of federal EV tax credits next?
Most likely, Nissan will be the next to join GM, Tesla, and Toyota in selling electric cars without a tax credit benefit. For more than a decade, the Nissan Leaf has been one of the most popular EVs in the world. This puts Nissan in a tight spot with the upcoming Ariya electric SUV.
Toyota and other automakers need to join forces for electric car sales
Toyota, GM, and Tesla, along with several other automakers, have lobbied Congress for an extension of the current tax credits, but they can’t agree on which brands should be eligible. The current proposal in Congress, made by the Biden administration, offers an additional $4,500 in EV tax credits to unionized carmakers. This would favor GM, Ford, and Stellantis, leaving out Tesla and Toyota.
What should you do if you want to buy one of the Toyota electric cars?
If you want to take advantage of the full $7,500 Federal EV tax credit, you’ll need to act fast and buy one of the Toyota models before these credits are gone. Of course, if you normally receive a tax refund or a tax credit won’t help you when you file with the IRS next year, it won’t matter when you purchase your Toyota EV.