Just as Toyota’s first all-electric vehicle — the 2023 bZ4X — hits the market, Bloomberg reports the $7,500 federal tax credit for the automaker’s vehicles will begin to phase out. Subaru, which sells the bZ4X’s corporate twin, the Solterra, is still eligible, however.
When a carmaker sells its 200,000th qualified vehicle, there’s a one-quarter delay from the quarter of that sale before it begins to reduce — first by half to $3,750, then half again six months after that, then down to nothing in an additional six months. The 200,000 vehicles sold rule applies in total to all qualifying vehicles sold by a manufacturer, not just on a model-by-model basis.
On Friday, Toyota announced it sold 3,876 plug-in hybrid and electric vehicles in June — putting it over the cap. Currently, Toyota has three electrified vehicles that qualify for the credit: the Prius Prime and RAV4 Prime PHEVs as well as the bZ4X electric SUV. From luxury brand Lexus, the NX plug-in hybrid SUV also qualifies.
Toyota joins Tesla and General Motors on the list of automakers who no longer qualify for the full tax credit; Tesla sold its 200,000th vehicle in 2018, and the credit fully expired at the end of 2019. GM’s eligibility for any portion of the tax credit ended March 31, 2020.
Who’s next? Nissan is likely the next closest manufacturer to reach the 200,000 vehicles sold threshold, and the introduction of the upcoming all-electric Ariya SUV may accelerate that timeline; Ford has also upped its EV production this year.
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