How Does the Federal Tax Credit for Electric Cars Work?

You may have heard about federal electric car tax incentives and how much they can help you save on a new vehicle—but how does the federal tax credit for electric cars work, and can it be applied to plug-in hybrid versions of the Range Rover and the Range Rover Sport? We’ve got the answers you’re looking for.

How Much Can You Save with Electric Car Tax Credits?

1. To understand how much you’ll save by purchasing an electric or plug-in hybrid vehicle, you’ll first need to estimate the total amount of income tax that you’ll pay for the current year.
2. You can then reference FuelEconomy.gov to see what kind of incentive is available with each vehicle.
3. Finally, you can deduct the incentive from the amount of income tax that you’d otherwise owe.
4. You’ll claim the incentive when you do your taxes. Since most income tax is automatically deducted from your paychecks each month, the most likely result of claiming this incentive is a higher tax return.

Which Models are Applicable for this Electric Car Tax Credit? 

Vehicles are only eligible for the government’s electric car tax credit if they meet the following qualifications:

• The vehicle has a battery capacity of 4–5 kWh or more
• The vehicle requires an external power source to recharge
• The vehicle’s GVWR is lower than 14,000 pounds
• The vehicle meets current emissions standards
• The vehicle will be driven primarily in the United States
• The vehicle has been built by qualified manufacturers

Now let’s get into specifics. The following federal electric car tax credits are currently available for new Land Rover vehicles:

• 2023 Range Rover PHEV: Up to $7,500
• 2023 Range Rover Sport PHEV: Up to $7,500
• 2020–2022 Range Rover PHEV: Up to $6,295
• 2020–2022 Range Rover Sport PHEV: Up to $6,295
• 2019 Range Rover PHEV: Up to $7,087
• 2019 Range Rover Sport PHEV: Up to $7,087

It bears emphasizing that the federal electric car tax credit is only available for new models, and it cannot be transferred to a subsequent owner. In other words, you shouldn’t expect to claim any federal EV tax incentives if you purchase a pre-owned vehicle.

How Long Will the Federal Electric Car Tax Credit Be Available?

After a manufacturer sells a certain number of eligible EVs or plug-in hybrid vehicles—200,000, to be exact—buyers of this brand’s vehicles can no longer claim any federal electric car tax credit. Manufacturers including GM and Tesla have already passed the threshold, so Jersey City and New York City drivers who want to benefit from this incentive are better off looking elsewhere!

Save on a Land Rover PHEV Today with Our Team!

If you’d like to learn more about the plug-in hybrid technology that powers select Land Rover SUVs, don’t hesitate to reach out and start up a conversation. We’d be happy to help you learn more or schedule some time behind the wheel. If you’re ready to move forward today, you can build and price the model of your choice or even apply for financing online, all from your home in Englewood or Fort Lee.