WASHINGTON, July 19, 2017 - Many people buying energy-efficient items look forward to the cash-back incentives to offset the cost of these high-dollar products, but without the tax credit some countries are seeing a steep decline in electric vehicle (EV) sales. When tax exemptions for Tesla EVs ended in Hong Kong, on April 1, dealerships did not move even one electric car, according to data analyses from the Wall Street Journal. Losing the tax credit increased the cost of the Tesla Model S by $55,000.
In the United States, incentives on new EV purchases range from $2,500 to $7,500, according to the Internal Revenue Service (IRS). Those incentives could soon be phased out as EVs become more readily available to the public, given falling sticker prices and accessibility to charging stations.
The U.S. incentives law stipulates that the credit will “phase out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles have been sold for use in the United States.” IRS statistics at the end of March showed Ford qualifying vehicles had nearly reached the half-way mark with over 94,000 cumulative sales. Cumulative sales for BMW topped 43,000 and Mercedes sales were over 10,000. Statistical information was not readily available for other manufacturers. Counts of sales began on December 31, 2009.