It’s been clear that federal tax credits for electric-vehicle purchases and leases have played a big role in EV transactions. Newly released research shows just how much.
Essentially half of mass-market EV consumers, or 49%, indicated in a J.D. Power survey that a combination of tax credits and incentives drove their vehicle choice. You might think they would have fewer premium-brand counterparts, but those have been even more influenced, 64% saying the breaks steered them to their specific purchases.
On the whole, 87% of EV acquirers this year received the federal EV tax credit, which totals up to $7,500. Consumers saved an average of $5,124 from that category alone, according to the study, up from $4,302 in 2023 and $1,629 in 2022.
The numbers include Tesla models. In fact, Tesla is among the three brands whose consumers were most influenced by tax breaks and incentives, according to the study. Seventy-two percent of them cited the money-savers as a key reason for their vehicle choices, exceeded only by Volkswagen consumers, at 81%, and Chevrolet acquirers, at 77%. Bringing up the low end of the scale were Hyundai, Kia and Toyota buyers, at 32%, 24% and 21%, respectively.
Lessees have particularly benefited from federal credits, as leases have been exempt from EV battery materials sourcing and vehicle assembly restrictions intended to shore up domestic production.
The credits’ future is in question, though, as the incoming Trump administration has indicated it plans to eliminate them, though many states offer their own credits.
Automakers are trying to head that plan off at the pass. The Alliance for Automotive Innovation, along with a group of EV and battery makers have urged Trump to retain the credit, which has kept EV sales rising, though more slowly than the industry expected several years ago when many automakers vowed to switch to all-EV lineups by the end of the decade. Most have changed up their plans, placing greater emphasis on hybrids to meet more consumers where they are, along with today’s limited charging infrastructure.
DIG DEEPER: Tax Credit Picture Could Throw a Wrench in Used Market
