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ADOPTING ELECTRIC VEHICLES: NOW WITH AN ADDITIONAL TAX CREDIT

ELECTRIC VEHICLES:

Electric Vehicles are an optimistic form of technology that has now emerged to boon the world with their enhanced features and has the potential to achieve a sustainable transportation future because of their low to zero carbon emissions, remarkably high efficiency, and low air, and noise pollution. Recent records show that there has been a significant rise in the adoption of Electric Vehicles all across the globe, which is undoubtedly creating a privilege for the automakers and technological industries. EVs will now create a sustainable future with widely available incentives, fuel savings, and comparatively lower maintenance than any other vehicle, as it holds many beneficial tax benefits. EVs are as affordable as any gasoline-powered vehicle, and by 2025, they will be more cost-effective than traditional gas vehicles. Rebates and incentives, as well as government initiatives to provide tax credits to customers, have proven to be critical in saving an estimated $2,500-$7,500 in up-front costs on the purchase or lease of a new EV.

Benefits of Adopting Electric Vehicles:

CLEAN AIR

Toxic emissions from petrol and diesel have led to several deaths every year globally. According to WHO, 4.2 million deaths are recorded every year due to ambient outdoor pollution and almost 99% of the global population is exposed to the rising air pollution that leads them to heart diseases, chronic diseases, pneumonia, strokes, or cancers. Nevertheless, EVs are crucial in reducing the air pollution and effects caused by them. ICE (Internal Combustion Engine) vehicles use disc brakes to slow down, whereas EV vehicles use regenerative brakes, which redirect braking energy back to the vehicle’s battery to power it. This reduces the desire to take breaks, resulting in lower particle emissions and cleaner, safer air in the environment.

COST-EFFECTIVE

Electric vehicles are considered to be the most cost-effective way of transportation and most economical to operate than ICE or standard cars. EVs are four times more cost-effective than a gas-powered car as they require comparatively less energy to travel the same distance. In Consumer Reports 2020, it has been noted that the owners of EV vehicles spend 60% less fuel than ICE vehicles. In addition, because they lack exhaust systems, fuel pumps, and starters, EVs have lower maintenance costs than gas-powered or standard cars. A recent study also found that after 36 months of continuous use on the road, EVs and light trucks have 31% lower service costs than gasoline-powered and ICE-powered vehicles.

LESS NOISE POLLUTION

Noise pollution is one of the impactful pollutions on the residents. Currently, 55% of the global population lives in cities where noise pollution shows adverse effects on human health and wildlife. During the COVID-19 pandemic in 2020, noise pollution from cars and bikes notably dropped from 35% to 68%, and with the adoption of EVs worldwide, these can be reduced permanently. Unlike Internal Combustion Engine cars, electric cars do not hold the need for gears, fans, or mechanical valves. As a result, EVs are quieter than any petrol, diesel, or gasoline vehicle, resulting in zero noise pollution. Many EV manufacturers emphasise aerodynamics so that even at higher speeds, electric vehicles are quieter than gasoline vehicles.

FREE AND PREMIER PARKING SPOTS

Many cities all across the world, provide an all-access pass to High- occupancy vehicle lanes for EVs of any size or passengers. Major locations also offer free and premium parking options. To find such spots, customers just need to do is look for a green-painted parking spot exclusively reserved for Electric Vehicles. Customers can also easily find a priority, free, and dedicated parking bay for their EV vehicles, ensuring safe and secure parking. In Milton Keynes, there are approximately 15,000 city centre parking bays that are free for all EV car and bike drivers. So, if customers want a premium and free parking facility, going electric will never be a bad decision.

CONVENIENCE

Many customers or EV users might not be aware, but charging Electric Vehicles are as easy and convenient as charging of any mobile phones. The majority of the EV users charge their cars and bikes while at home and during their sleeping hours, and a study shows that the battery-electric cars and plug-in hybrid electric cars require less time to charge when completely depleted. EVs can be charged in two ways: Level 2 and DC Fast charging, with DC Fast charging being preferred by users when they are idle or at work, and Level 2 charging being installed primarily in homes or parking lots. Major automakers, such as Tesla, have begun to build their own network of charging stations, with 900 already in operation in the United States.

GRANTS FOR ELECTRIC VEHICLES

Investing money in Electric Vehicles and their charging is profitable and more affordable than anyone could ever imagine. There are several rebates, tax credits, and grants by utilities and governments that can offer every EV User a sustainable future.  Adopting EVs has now become a major decision by the population all across the world as the Office for Zero Emission Vehicles (OZEV) offers beneficial grants to help business people and individuals to install charging points or buy an Electric Vehicle. There has been observed considerable rapid growth in EV adoption due to four major grants:

  • Plug-in Car Grant (PICG) – discount when purchasing a brand new low-emissions car
  • Workplace Charging Scheme (WCS) – helps businesses with the upfront cost of installing charger points
  • Electric Vehicle Home Charge Scheme (EVHS) – contributes to the cost of installing a charging point at home
  • On-street Residential Charge point Scheme (ORCS) – support local authorities that seek to install on-street residential car chargers.

Along with the grants offered by governments for the EV and EV Charging points, there are many significant tax credits, benefits & incentives provided for Electric Vehicles. 

What are Tax Credits?

Tax credits are nothing but a federal incentive formulated to drive the purchase of electric vehicles. The incentive comes as a tax credit worth $7,500 and not as a check you receive in your mail. Primarily, all Electric Vehicles and Plug-in Hybrid Electric Vehicles purchased since the year 2010 are eligible for this federal tax credit. However, depending on your battery capacity used to power the vehicle, the exact credit amount may vary. But how exactly does this tax credit work, and is your car eligible? These are some of the criteria through which you can find out if your vehicle is eligible for a tax credit.

Vehicle Eligibility Criteria

  • The purchase must be after Dec,31 2009.
  • Should hold a battery capacity of a minimum of four-kilowatt hours.
  • Hold an ideal weight of up to 14,000 pounds.
  • The vehicle must be purchased new and from a manufacturer.
  • The tax credit is non-transferable and only the owner or the buyer is eligible for the tax credit. In lease condition, the tax credit remains with the leasing company or the manufacturer as the car owner.
  • Buyers should not buy Electric vehicles to resell them.
  • The EV should meet all the emission standards.
  • It should contain a traction battery and an external plug-in source of recharge.

How much of a Tax Credit are you eligible for?

The tax credit ranges basically from $2,500 to $7,500 which is dependent on the battery capacity your vehicle holds. Tax credit immediately begins to phase out for a manufacturer when he sells approximately or more than 200,000 qualified vehicles. If your Electric vehicle is crucial in drawing propulsion energy from an EV battery with at least 5 kW and is purchased after December 31, 2009, the tax credit ranges up to $2,500 plus. It further varies to $417, plus an additional $417 for each kilowatt (kW) hour of an EV battery capacity above 5 kW hours. However, the tax credit for your qualified two-wheeler plug-in EV expires if purchased after 2021. The federal tax credit and incentive are only worth $7,500 to you if your tax bill at the end of the year is $7,500 or more than that. Let’s say you purchase a brand-new Nissan Leaf or any eligible Electric Vehicle and you owe $4,000 in income tax for the same year. That’s all that the tax credit will be for you. No one will be writing you a refund check for the other $3,500, and the unused tax credit portion will not remain eligible for the following years.

What are Tax Benefits and Incentives?

Government offers rebates to promote electric vehicle use and ownership heavily. These rebates are nothing but the Tax benefits and Incentives that are highly beneficial for all the Electric Vehicle owners and for businesses. Major reliance on the fuel sources, especially on those that are not non-renewable, proves to be a source of instability within the federal and local energy providing sources, and to contribute in diversifying with the energy consumed, federal governments offer tax breaks and incentives for individuals leasing or owning an Electric Vehicle or an EV charging point. Through more and more adoption of an EV, the consumption of petroleum is reduced and is replaced further with domestic energy sources like natural gas, coal, nuclear and renewable energy sources such as wind and solar. Providing tax benefits and incentives to the owners of EV, not only increases the sales of EV, but also contributes in maintain a stable and diversified energy infrastructure.

CONCLUSION

Electric Vehicles are proved to be a blessing for the technology industry globally. The large-scale adoption of EVs would be not only a win for consumers, but also for the utilities, automakers and indirectly to the environment. The outstanding benefits which are been provided to obtain a sustainable and green environment results in high adoption rate of Electric Vehicles among the population. Electrical Vehicles are receiving a foothold in the transportation industry, and added utilities are cushioning the rise in demand from all regions of the world. The electric structures benefit both utilities and EV owners by providing an incentive to charge Electric Vehicles when electricity is low in demand. Also, the federal and state involvement by offering additional tax credits, incentives and benefits is significant to ensure the rapid demand and adoption of EVs as well as assuring zero burden on transportation industry. Henceforth, if this is what a customer is seeking for, adopting an Electric Vehicle is an excellent decision!

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