- The Toyota electric vehicle tax credits were up to $7,500
- The Toyota electric vehicle tax credits won’t benefit 2023 Toyota bZ4X buyers now
- Maybe you will be able to find a Toyota RAV4 Prime now
There has been a mad dash for electric vehicles lately, especially with rising gas prices. Unfortunately, the Toyota electric vehicle tax credits are starting to phase out now that the automaker has reached the 200,000 unit threshold. What does that mean for new electric vehicles like the 2023 Toyota bZ4X?
The Toyota electric vehicle tax credits were up to $7,500
The Toyota RAV4 Prime in red | Toyota
After 2010, all electric and plug-in hybrid vehicles were eligible for the federal income tax credit of up to $7,500. The total amount varied based on the actual EV battery capacity, but the maximum was $7,500. GM ran out of these tax credits on March 31, 2020, and Tesla ran out in 2019.
The government limited automakers to the first 200,000 vehicles sold, and Toyota just reached that limit. Automotive News says that Toyota sold its 3,876 plug-in hybrid or electric vehicles in June. Now, anyone who buys one of these cars won’t get the full benefit of the federal tax credit. There might be more state or local credits buyers can look up, but it won’t be as much of a discount or credit.
“Toyota’s cumulative sales of eligible vehicles have now surpassed that threshold, according to data compiled by Bloomberg and confirmed with the company.”
Automotive News
Toyota thinks the government should extend the federal tax credit amount, which has been in the works a few times over the years.
The Toyota electric vehicle tax credits won’t benefit 2023 Toyota bZ4X buyers now
While Toyota’s electric vehicle tax credits have run out, for now, these credits aren’t gone entirely. It will reduce the $7,500 by 50% at first, and then another 50% after that. The federal tax credit will shrink throughout the year until it disappears entirely. Brands like Toyota and Tesla have been against a recent proposal offering buyers an additional $4,500 for unionized automakers. The companies that would benefit from these the most are GM, Ford, and Stellantis. Either way, nothing made it through congress.
The 2023 Toyota bZ4X electric SUV has barely rolled off the production line at this point. According to Toyota Motor North America sales numbers for the first half of the year, the automaker sold 232 bZ4X EVs. Then it promptly recalled all the units due to the danger of its wheels falling off.
Either way, there hasn’t been much chance for people to get behind the wheel of this EV before the tax credits ran out. Will that hurt future sales? It has the potential to, unless Toyota can get something else through congress.
Maybe you will be able to find a Toyota RAV4 Prime now
The Toyota RAV4 Prime and Prius Prime were popular vehicles, thanks partly to the federal tax credit. Without such a large incentive, people might look to other brands that are still eligible. The RAV4 Prime Plug-In Hybrid was eligible for the full $7,500, while the Prius Prime Plug-in Hybrid was eligible for $4,502. The earlier 2012–15 Prius Plug-in Hybrid and 2012–14 RAV4 EV were eligible as well.
The 2022 RAV4 Prime SE trim starts at $40,300 and gets 38 mpg in the city using the gasoline engine and 94 MPGe. MPGe is the EPA-equivalent of gasoline fuel efficiency for electric operation. The next trim up is the XSE which starts at $43,625. Thanks to the tax credit and the fuel economy, these have been pretty hard to find.
Like many other vehicles these days, the RAV4 Prime is selling for above MSRP even with some miles. One listing on CarMax shows a 2021 Toyota RAV4 Prime Plug-In SE with 19,000 miles on it for $54,998. Another listing for a 2021 with 12,000 miles shows a price of $58,998.
Keyword: Toyota Electric Vehicle Tax Credits Ran out Before the bZ4X EV Had a Chance