Full $7,500 electric vehicle tax credit likely to be phased out Oct. 1

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It appears that sales of Toyota’s plug-in models in recent months were enough to trigger the automaker’s federal electric vehicle tax credit phase-out period in the last quarter, leaving buyers with less than nine months to buy a vehicle like the BZ4X electric car or the RAV4 Prime plug. -in a hybrid and be able to claim the full amount of $7,500.

Across its Toyota and Lexus brands, in a sales update released Friday, the automaker said it sold 3,876 eligible plug-in vehicles in June, for a total of 17,454 in the first half of 2022, compared to 28,529 in the first half of 2022. same period last year, mainly due to a sharp decline in sales of the Prius Prime plug-in hybrid.

According to Bloomberg, citing its own data verified with the company, that’s enough for the automaker (with Toyota and Lexus considered together) to pass 200,000 eligible vehicles, from which the phase-out begins.

Toyota has not yet been able to directly confirm Green Car Reports that he exceeded the total. We’ll update and clarify this if and when it does, as it may affect the vehicle purchase timeline for many families looking to upgrade to a plug-in model.

2023 Toyota bZ4X Limited AWD

As noted by the IRS, the phasing out of the 30D, the Plug-In Electric Drive Credit, begins for a particular automaker’s products “in the second calendar quarter after the quarter in which the 200,000th vehicle was sold. “.

Assuming it now exceeds that threshold, that would begin Toyota’s phase-out period on October 1, with the electric vehicle tax credit dropping to $3,750 until April 1, 2023. Then it will drop to $1,875 until it disappears completely on October 1, 2023. Equivalent tax credits for plug-in hybrids increase to 50% of their total amount, then to 25% of the full, for these same periods. So while the $7,500 full credit for the RAV4 Prime will follow the same schedule, the $4,502 full credit for the Prius Prime will be cut to $2,251 and $1,126, respectively.

2022 Toyota Prius Premium

2022 Toyota Prius Premium

2022 Toyota Prius Premium

2022 Toyota Prius Premium

2022 Toyota Prius Premium

2022 Toyota Prius Premium

That would make Toyota the third automaker, after GM and Tesla, to hit the 200,000 cap, with Ford and Nissan also approaching it. For Toyota, that’s a quarter earlier than the automaker suggested during a March check-in, but as we expected based on an ongoing count from EVAdoption.

Toyota and Lexus are considered together for the electric vehicle tax credit, so it’s being phased out in the same way for the luxury brand Lexus, with its NX 450h+ plug-in hybrid and upcoming RZ 450e electric crossover.

2023 Lexus RZ450e

2023 Lexus RZ450e

Toyota says the electric vehicle tax credit milestone will increase its costs and hamper the adoption of climate-friendly cars, according to Bloomberg.

Toyota last month joined GM, Ford and Stellantis in asking congressional leaders to extend the electric vehicle tax credit to anyone who buys a qualifying vehicle, until an expiry date s ‘applying to all electric vehicle products, regardless of car manufacturer or cumulative sales. Toyota had previously opposed proposals to extend the electric vehicle tax credit, instead of a bonus that applied to union-made vehicles. The Electric Vehicle Tax Credit was later to be part of the reconciliation package following the Infrastructure Bill, but even recently Senator Joe Manchin called an expansion of the Electric Vehicle Tax Credit “ridiculous”. electric vehicles.

Previously, the expansion had bipartisan support in Congress, but in 2019 it was dropped from a federal spending bill based on then-President Trump’s “extreme resistance.”

Toyota has shown positive trends in the hybrid sector. Electrified vehicles, which encompass hybrids, plug-in hybrids, electric vehicles and fuel cell models, now account for about 25.5% of its sales, down from about 23% in the same period a year ago.

2021 Toyota RAV4 Prime XSE

2021 Toyota RAV4 Prime XSE

The RAV4 is a continued market leader. Toyota said it delivered 10,153 RAV4 Prime plug-in hybrids for the first half of the year, very closely matching the 20,000 it says have been allocated to the US market. The 40-mpg RAV4 Hybrid posted its best first-half sales, at 86,673 over the six-month period.

Sales of the bZ4X electric car are just beginning, with a US total of 232 at the end of June.


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