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$55,242 Average Cost: Electric Vehicles in the US and the $7,500 Tax Credit

(photo: CNBC)

In the US, despite high average costs of $55,242 per new electric vehicle.

Electric Vehicle Costs and Tax Credits in the US

Electric vehicles (EVs) in the US are expensive, averaging $55,242 per new vehicle. However, a federal tax credit of up to $7,500 is available for qualifying models helping to offset costs. Eligibility hinges on criteria like vehicle type buyer income and where the vehicle is assembled.

Criteria for Tax Credit Eligibility

To receive the full $7,500 federal tax credit, an EV must meet specific requirements, including being assembled in North America. For example, despite its German origins and the Tennessee-built Volkswagen ID.4 qualifies for the full incentive. This provision benefits both domestic and foreign automakers encouraging broader adoption of EVs, according to the report of Motor Biscuit.

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(photo: The Autopian)

Comparative Costs Across Countries

The cost disparity between EVs in the US and other countries is significant. For instance, the BYD Seagull costs $10,000 to $12,000 in China, much less than the average American EV. Despite higher costs in the US and the federal tax credit helps make EV ownership more feasible.

Impact on Consumer Choices

The availability of the $7,500 tax credit influences consumer decisions in the EV market. Models like the Chevrolet Blazer and Tesla Model Y qualify for the full credit making them more affordable options. This incentive not only lowers upfront costs but also promotes environmentally friendly transportation.

While EVs remain pricey in the US, the $7,500 federal tax credit mitigates some financial barriers. Criteria like vehicle price and assembly location ensure both domestic and foreign manufacturers benefit, supporting a diverse EV market. As demand grows, these incentives play a crucial role in making EVs more accessible and advancing sustainability goals in the automotive industry.

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