Buying an electric vehicle (EV) can be a smart move for your wallet and the planet — and it gets even better when you take advantage of the many incentives available in the United States.
From federal tax credits to state rebates and perks, you could save thousands of dollars when purchasing a new or used EV.
In this guide, you’ll learn about the most important EV incentives at both the federal and state level so you can make an informed decision and save big.
What Are EV Incentives and Why Do They Matter?
EV incentives are financial programs and benefits offered by the U.S. federal government, individual states, local governments, and sometimes even utilities.
Their goal is to encourage more people to switch from gas cars to cleaner electric vehicles. These incentives can make EVs more affordable, especially for first-time buyers.
You can benefit from:
- Federal tax credits (up to $7,500)
- State rebates and grants
- Free access to HOV lanes
- Reduced registration fees
- Home charging station rebates
- Free or discounted public charging
Let’s start with the big one: the federal EV tax credit.
Federal EV Tax Credit – Up to $7,500
The federal government offers a clean vehicle tax credit of up to $7,500 for eligible new EV purchases.
As of 2024–2025, here’s how it works under the Inflation Reduction Act (IRA):
Who qualifies?
- You must buy a new qualified EV or plug-in hybrid
- Your income must be under:
- $150,000 for single filers
- $225,000 for heads of household
- $300,000 for joint filers
- The car’s MSRP must be under:
- $55,000 for sedans
- $80,000 for SUVs, trucks, and vans
How much can you get?
- $3,750 if the vehicle meets battery component requirements
- Additional $3,750 if the vehicle meets critical mineral sourcing rules
- Total possible credit: $7,500
What makes a vehicle eligible?
- Must be assembled in North America
- Must meet battery and sourcing requirements
- Vehicle must be on the IRS approved list
How to claim it?
- You can transfer the credit to the dealer at the time of purchase (starting in 2024), which lowers your upfront cost
- Or, you can claim it on your tax return for the year you bought the vehicle
Used EV Federal Tax Credit – Up to $4,000
Buying a used EV? You might also qualify for a federal tax credit of up to $4,000, or 30% of the purchase price, whichever is lower.
Used EV credit rules:
- Car must be at least 2 years old
- Price must be $25,000 or less
- Buyer must not have claimed another EV credit in the last 3 years
- Income limits are lower than for new EVs:
- $75,000 for single filers
- $112,500 for heads of household
- $150,000 for joint filers
This credit can help make EVs affordable for more buyers, especially first-timers.
State EV Incentives – Extra Savings Where You Live
Beyond the federal credits, many states offer their own EV incentives. These vary widely depending on where you live — some are generous rebates, while others include special benefits like carpool lane access or charging incentives.
Here are some examples of popular state-level EV programs:
California
- Clean Vehicle Rebate Project (CVRP): Offers up to $7,500 in rebates depending on income and vehicle type
- HOV lane access for qualifying EVs
- Rebates for home charging equipment
New York
- Drive Clean Rebate: Up to $2,000 for new EV purchases
- Stacks with federal credit
- Many utility companies offer charging station rebates
Colorado
- Offers a state tax credit of up to $5,000 for new EVs
- Also supports used EV purchases with smaller credits
- Local programs may add more savings
New Jersey
- Offers up to $4,000 off new EVs under the Charge Up NJ program
- No sales tax on qualifying EVs — big savings at the time of purchase
Oregon
- Oregon Clean Vehicle Rebate Program gives:
- $2,500 for new EVs
- Additional $2,500 for low- to moderate-income households
- Up to $5,000 total rebate
Texas
- Offers a $2,500 rebate for eligible EVs under the Texas EV Incentive Program
- Rebates often go quickly, so act fast
Tip: Every state is different. Check your local state energy department or DMV website for current EV programs.
Other Local and Utility Company Incentives
You might also qualify for extra benefits from your city, utility company, or electric co-op. These programs can help reduce charging setup costs or lower your monthly electricity bills.
Common local EV perks include:
- Rebates for Level 2 home charging stations
- Time-of-use (TOU) electric rates for cheaper nighttime charging
- Discounts on public charging memberships (like ChargePoint or EVgo)
- Free parking or toll exemptions in some cities
Examples:
- Los Angeles Department of Water and Power (LADWP): Offers rebates up to $1,000 for home EV chargers
- Xcel Energy (in several states): Offers rebates and charger installation support
- Con Edison (New York): Time-of-use rates and smart charger rebates
Incentives for EV Charging Stations at Home
If you plan to install a Level 2 home charger, you may be eligible for rebates or tax credits that cover part of the equipment and installation costs.
Federal tax credit for EV charging equipment:
- Covers 30% of the cost (up to $1,000 for residential installations)
- Applies to both equipment and professional installation
- Available through 2032 under the IRA
State and utility charging incentives:
- Many states offer $300 to $1,500 in rebates
- Some utilities even provide free Level 2 chargers with certain rate plans
Tip: Always check if you need pre-approval before installing to qualify for rebates.
Do EV Leases Qualify for Incentives?
Yes! If you lease an EV, the dealer or leasing company usually claims the federal credit — but they often pass those savings to you through lower lease payments.
This is a great way to drive a new EV for less money upfront, especially if you don’t qualify for the credit personally due to income limits.
How to Find All Available Incentives for You
To find all the EV incentives in your state or ZIP code, try these tools:
- Fueleconomy.gov Tax Credit Tool
- Department of Energy’s Alternative Fuels Data Center (AFDC)
- Your state’s Department of Transportation or Energy Office
- Your electric utility company’s website
Final Thoughts
With the right information, you can save thousands on your next electric vehicle by using the federal tax credit, state rebates, and local programs.
From a $7,500 federal credit to home charger rebates, there are many ways to cut costs and make your EV transition smoother.
Before you buy:
- Check your eligibility for the federal and used EV credits
- Look up your state’s rebate and tax policies
- Contact your utility company for local charging programs
- Ask dealers about incentives already applied to lease or purchase deals
The best EV deal starts with knowing your options — and acting while these incentives are still available