Act Fast If You Want Tax Credits On Toyota And Nissan EVs

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Soon a huge EV credit will disappear for both models

Here in America, the US government has made its stance on hybrids and electric vehicles like the Toyota bZ4X pretty clear. The folks that run the country want you to buy one. EVs are seen as greener transport, and it's widely known the federal government will literally pay you to buy an electric car. For Toyota and Nissan, that won't be the case for much longer.

The aforementioned Toyota as well as the Nissan Ariya and Leaf are about to lose their eligibility for the government's full $7,500 federal EV tax credit. But it's not just those vehicles. It's all eligible EVs and hybrids from Toyota and Nissan. That means cars like the RAV4 Prime are also on the chopping block.

2023 Toyota bZ4X Forward Vision Toyota
2023 Toyota bZ4X Front View Toyota
2023 Toyota bZ4X Rear View Toyota

The IRS's 'IRC 30D' EV tax credit has a stipulation in it that effectively says that when an OEM sells more than 200,000 qualifying EVs or hybrids, that OEM's vehicles are no longer eligible for the tax credit. Both Toyota and Nissan are rapidly approaching that 200,000 unit ceiling, with 190K and 170K units sold respectively. We imagine that more popular models such as the Nissan Leaf are to "blame" here. There is a bit of a silver lining. The credit, which is given based on each individual buyer, reduces by 50% in the first quarter after eligibility is lost, then to 25% of the total amount two quarters later, and then remains at 25% for two quarters before ending altogether.

Thankfully, that slow phase-out isn't the only glimmer of hope for EV and hybrid buyers. Currently, a new bill for EV tax credits seeks to allow for up to $12,500 in credits, far more than the original amount. Called the "Clean Energy for America Act," the bill has yet to be approved, but if it is, could prolong the availability of such credit for Nissan and Toyota.

2023 Nissan Ariya Forward View Nissan
2023 Nissan Ariya Front-End View Nissan
2023 Nissan Ariya Side Angle Driving Nissan

That doesn't change the fact that both vehicles are slotted firmly into the "affordable EV" segment, with each EV's pricing hovering around the average cost for a new vehicle in the United States ($40,000). If anything, the federal government's phase-out of manufacturers that have sold more than 200,000 eligible units indicates the government's approval of an OEM's stance on EVs. Whether the government continues to show its approval with hard cash, however, is another matter entirely. For now, it's best to try and take advantage of the credit while you can if you're already in the market for Toyota and Nissan EVs or hybrids.

2023 Nissan Ariya Dashboard Nissan
2023 Toyota bZ4X Central Console Toyota
2023 Nissan Ariya Rear Angle View Nissan
2023 Toyota bZ4X Rearward Vision Toyota

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2023 Nissan Ariya Side View Driving
2023 Toyota bZ4X Sideward Vision
2023 Nissan Ariya Forward View
2023 Nissan Ariya Side Angle Driving
2023 Nissan Ariya Front-End View
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