Toyota used all of its electric vehicle tax credits on hybrids

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Toyota has hit the cap of 200,000 units on electric and plug-in hybrid vehicles eligible for a $7,500 federal tax credit. While the Japanese automaker has exactly one electric vehicle in its lineup that qualifies for the credit, Toyota has primarily used its plug-in hybrid tax credit.

Most of the credits were used on Toyota’s Prius Prime and RAV4 Prime plug-in hybrids. Lexus, Toyota’s luxury brand, also offers the NX plug-in hybrid crossover. The bZ4X, the automaker’s new all-electric SUV, didn’t even really have a chance to hit the streets before the tax credits ended. The first orders were just are starting to ship, but a few weeks ago Toyota started recalls on the bZ4Xs due to a wheel drop issue. So far, the company has sold 232 electric vehicles this year, according to Toyota’s semi-annual sales report.

Toyota also plans to up its electric vehicle game in the coming years, with 30 electric vehicles planned for 2030, with 15 all-electric models to be on the market by 2025. The company is working on building a battery factory in North Carolina to support its production of electric vehicles. , and has just partnered with Redwood Materials, a lithium-ion battery recycling startup, to collect and recycle batteries and battery materials for future electric vehicles.

Toyota isn’t the first automaker to cap – Tesla and General Motors have also hit their caps of 200,000 units. GM, Toyota, Ford and Stellantis are among electric vehicle automakers lobbying Congress to expand incentives ahead of the upcoming November election, when Republicans could potentially take control of both houses of Congress. The right has historically opposed subsidies for electric vehicles, which auto experts and lawyers say will make it difficult to meet the Biden administration’s goal of 50% vehicle sales. electricity by 2030.

People who have a Toyota order in progress will still receive full credit as long as they delivered it before the end of this quarter, which ends September 30. The IRS will have to confirm that Toyota’s subsidies have run out, and once the agency does, Toyota will have four quarters to offer buyers an electrified vehicle for a reduced tax credit. During the first two quarters, buyers will be entitled to a tax credit of $3,750, and during the last two quarters, they will obtain a credit of $1,875.

As a reminder, the federal tax credit is not a rebate for an EV. This is a rebate from which taxpayers benefit at the end of the financial year. So if you owe $10,000 in federal tax, congratulations, with the $7,500 rebate, you now owe $2,500. However, if you only owe $5,000, you owe nothing and the remaining $2,500 simply disappears.

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