Partner Spotlight: Electrification Coalition
The “Big, Beautiful Bill,” recently signed by President Trump, is expediting the expiration of federal EV tax credits. Can you tell us what exactly is expiring and when?
EP: There are four tax credits that are particularly relevant to EVs and EV charging. Three of those relate specifically to electric vehicles and expire after September 30, 2025. There's the new clean vehicle credit (30D), which provides up to $7,500 for individuals buying a new EV. Then there's the qualified commercial clean vehicle credit (45W), which gives up to $40,000 per vehicle for fleets buying new EVs. And then there's the previously-owned clean vehicles credit (25E), which is worth up to $4,000 for individuals buying used EVs. Like I said, all three of those credits only apply to vehicles purchased on or before September 30, 2025. The fourth one, the alternative fuel vehicle refueling property credit (30C), applies to EV charging stations, allows individuals to claim up to $1,000 per charger, business to claim up to $100,000 per charger, and expires after June 30, 2026.
If a consumer orders or leases an EV before the expiration date but takes delivery after, are they still eligible for the tax credit?
EP: Yes! The IRS recently released guidance clarifying that as long as the vehicle is purchased on or before September 30, 2025, the purchaser can still claim the EV tax credit. However, charging infrastructure must be placed into service before the June 30, 2026 deadline to be eligible for the 30C credit.
Once these tax credits expire, are there other federal, state, or utility rebates or incentives consumers can leverage?
EP: While there are other programs dedicated to supporting EV manufacturing and building out the nation's charging infrastructure, there aren't really any other incentives available to consumers at the federal level. While many other states offer incentives, Ohio doesn’t, though there are several utilities that have EV-related programs. AEP Ohio, for example, offers a reduced electric rate for EV owners, and Consolidated Electric Co-op and Firelands Electric Cooperative both offer a $250 credit for a level 2 charging station.
What advice do you have for municipalities that may be considering tax credits to help with fleet electrification?
EP: Elective pay (sometimes referred to as direct pay) is still a thing! Public entities can claim both 45W and 30C even though they do not have a federal tax burden or file federal taxes. So, if you're a municipality looking to get $7,500 off a light-duty EV (and up to $40,000 off a medium- or heavy-duty EV), place your purchases now, if possible!
I'd also like to reaffirm that municipalities don't have to file for the tax credit by September 30--they just have to purchase the vehicle.
Additionally, the 45W tax credit isn't subject to sourcing requirements or other restrictions on vehicles, so almost all EVs should qualify (there's a list on the IRS website of qualified manufacturers).
If you can't get the purchase done by September 30, cooperative purchasing programs, such as Drive EV Fleets, can help fill the gap that tax credits leave behind.
What should consumers expect in terms of future support? Will similar credits or incentives return?
EP: Under the current Congress and Presidential Administration, we don't expect to see any new federal investments in EVs or charging infrastructure. However, EVs across the board are continuing to get cheaper as technology advances, so there may not be as much of a need for tax credits moving forward: one study predicts that EVs could cost about the same as gas cars as early as next year.
Is there anything else that consumers should know before these tax credits expire?
EP: For individuals, now's a great time to lease or buy an EV! Dealers are offering great deals, especially on used EVs that qualify for the $4,000 used EV tax credit.
Make sure to get the Clean Vehicle Time-of-Sale report from the dealer after purchasing a new (for fleets and individuals) or used (for individuals) EV--that report is needed to file for the tax credit.
Due to sourcing requirements, not all EVs qualify for the new clean vehicle credit (that's the one for individuals), so check fueleconomy.gov for a list of EVs that do. For models not on that list, leasing can be a great option, since dealers are able to claim the qualified commercial clean vehicle credit for vehicles they lease out, and then pass the savings onto consumers.
Learn more about the Electrification Coalition here!