$15,000 rebates: Enough to make CA drivers go electric?

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A Toyota Prius gets charged in downtown LA. Photo by Amy Ta.

For years, the government has offered incentives to help people purchase electric cars. Now, city and state programs are pushing people toward electric too, all with different requirements. Navigating the ever-changing rules can be confusing. Max Ghenis, an economist and founder of the nonprofit Policy Engine, is here to help.

So far, 23 electric vehicles meet the new requirements laid out by the Inflation Reduction Act (IRA). That number is lower than in the past because the “final assembly” of eligible cars must take place in the U.S. instead of China. 

“Later this year, the IRS will issue guidance on the elements of the bill that have to do with critical minerals and battery components. So this is basically largely to ensure that those parts of the car are not made in China,” Ghenis says. 

Under the IRA, EV owners will receive a $7,500 tax credit. That does not include particular models from Tesla or General Motors because of a MSRP cap of $80,000 for certain trucks, vans, and SUVs. The cap for other vehicles is $55,000. 

That $7,500 credit is something you have to file on your taxes — for now.
“That's still how it will be until [the year] 2024. So the bill gives the option for you to transfer that tax credit to the dealer starting 2024, at which point, they could … reduce the price for you. And you don't have to deal with it on your taxes,” he explains. 

Ghenis adds that starting in January 2023, an income cap will go into effect: $150,000 for singles and $300,000 for joint filers. 

California also offers the Clean Vehicle Rebate Project, which gives rebates from $1,000 to $7,000. Those eligible are single residents who have an income of $135,000 max and joint filers who make $200,000 max.

“It's a big impact. You're looking at — between state, federal, local — upwards of $10,000, maybe $15,000 [in rebates]. If you get all the credits and you buy the charger … I think that really is enough money to move the needle for a lot of folks.” 



  • Max Ghenis - economist and founder of the nonprofit Policy Engine