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Commercial EV Tax Credit

Can non-taxable entities like nonprofits, cities, or governments with fleets get the commercial tax credit?

Yes, the Commercial Clean Vehicle Tax Credit, also known as Internal Revenue Code 45W, is refundable (or direct pay) for tax-exempt entities like nonprofits or governments (i.e., cities or counties). This means that tax-exempt entities can claim and receive the tax credit even though they don’t pay any taxes. The IRS treats the tax credit as if it were an overpayment of taxes and refunds the money to the tax-exempt entity even though no taxes were paid.

Leasing EV Tax Credit

If I am leasing an EV and at the end of my lease I purchase the vehicle from the dealer, will the used vehicle purchase tax credit apply?

IRS Guidance FS-2023-29 indicates that “original use” with regard to leases is, “where a vehicle is acquired for lease to another person, the lessor is the original user.This means that the finance company, which actually owns the vehicle, is the original user.

Since the original use would be the lessor (owner of the vehicle), we understand this to mean that the finance company would be the original use, and the lessee (person leasing the vehicle) could buy the vehicle as a used vehicle using the tax credit, as long as the vehicle and buyer meet other eligibility requirements.

Used EV Tax Credit

Does the amount of the used EV tax credit depend on whether a vehicle is all-electric or plug-in hybrid electric?

No, both all-electric vehicles and plug-in hybrid electric vehicles are eligible for the full $4,000.

Does the vehicle purchase price for the previously owned Clean Vehicle Tax Credit depend on the type of vehicle purchased, such as a van, pickup truck, SUV or other vehicle?

No, all previously owned clean vehicles are eligible for a tax credit of up to $4,000 or 30% of the vehicle sales price, whichever is less.

If a vehicle has already received a tax credit when it was purchased as new, is it eligible for the used tax credit?

Yes. A vehicle is limited to one credit per vehicle for each type of credit, meaning that a vehicle can receive the tax credit as a new vehicle and again as a used vehicle for a different owner.

Do I have to purchase the vehicle from a dealer?

Yes, to be eligible for the tax credit, the vehicle must be purchased from a dealer registered with the IRS.

Can businesses receive the previously owned clean vehicle tax credit?

No, only individuals can receive the previously owned clean vehicle tax credit.

How much is the used EV tax credit?

The previously owned clean vehicle tax credit can be up to $4,000 or 30% of the vehicle sales price, whichever is less.

EV Tax Credit Transferability

Do I still need to meet the income limits if I transfer the tax credit to a dealer?

Yes. If you transfer the tax credit, you need to sign a document attesting that you expect that your income did not exceed the income limits either last year or this year. If your income exceeds the limits for both of those years, you will be required to repay the amount received for transferring the tax credit to the IRS in addition to your normal taxes.

Can I access the upfront tax credit from a direct-to-consumer manufacturer?

The transferable tax credit applies if you buy a vehicle from a direct-to-consumer manufacturer, such as Tesla, Rivian, or Lucid. The definition of “dealer” in the statute is an organization licensed in a state or territory to sell vehicles. The new guidance goes further to state, “To allow for flexibility, especially in the case of direct-to-consumer sales, the proposed definition of dealer includes a dealer licensed in any jurisdiction described in section 30D(g) (other than one exclusively licensed in a U.S. territory) that makes sales in jurisdictions in which it may not be licensed.”

If you meet the buyer income limits and the vehicle meets the tax credit requirements, you can purchase from a direct-sales EV manufacturer (online, if necessary) and receive the tax credit upfront.

Can I transfer the tax credit on more than one EV?

Each taxpayer can transfer two EV tax credits per year. This can be two new clean vehicle tax credits, OR it can be one new clean vehicle tax credit and one used clean vehicle tax credit. In the case of those filing joint returns, each person may transfer two tax credits per year as described in the last sentence. So, a household filing jointly can transfer up to four clean vehicle tax credits each year.

Do I need to transfer my tax credit to the dealer?

No, you do not need to transfer your tax credit to the dealer. If you want to wait for the tax credit and receive it as a tax refund when you file your taxes next year, you can do that.

If I get my tax credit at the time of sale, will I still need to pay taxes?

You still have to file your tax return and file Form 8936 with your Vehicle Identification Number (VIN). The dealer will give you the necessary paperwork at the time of sale for Form 8936. Be sure you receive a successfully submitted seller report before you leave the dealership. Download our EV Shopper Checklist to help you at the dealership.

Does the dealer need to have tax liability to participate in the credit transfer?

No. The dealer does not need to have tax liability to receive the transfer. The dealer simply acts as a pass-through for transferred tax credits. The dealer is required to pass the full amount of the tax credit on to the buyer.

Do I need to have tax liability to receive the upfront tax credit?

No. You can still get the full amount of the tax credit if you transfer your tax credit to the dealer. Historically, many tax credits haven’t been accessible to lower-wealth individuals and households because lower earnings mean lower tax liability. Because the EV tax credits are transferable, the EV buyer no longer needs to have tax liability to access the credit.

What does it mean that the new and used EV tax credits are transferable?

It means that when you purchase an eligible electric vehicle (EV) or plug-in hybrid electric vehicle (PHEV) and you meet the income requirements, you can choose to transfer your tax credit to a registered dealer and get the FULL amount of the tax credit upfront as a reduction on the price of the vehicle.

For NEW vehicles: Depending on the vehicle, you could get $3,750 or $7,500 off of the purchase price at the time of the sale. This money can also be used as a down payment on the vehicle.

For USED vehicles: Depending on the vehicle, you could get $4,000 off of the purchase price at the time of the sale. This money can also be used as a down payment on the vehicle.

New EV Tax Credit

Does the amount of the new EV tax credit depend on whether a vehicle is all-electric or plug-in hybrid electric?

No, both all-electric vehicles and plug-in hybrid electric vehicles are eligible for the tax credit based on whether their batteries meet the critical minerals requirements and the battery component requirements.

If I ordered a vehicle in 2023 and it was delivered in 2024, does the Foreign Entities of Concern rule apply?

Yes, the tax credit guidance is based on when the vehicle is placed in service, so if you take delivery of your vehicle in 2024, the guidance at the time you take delivery of your vehicle will apply. FuelEconomy.gov provides updated information on vehicle eligibility.

Are vehicles made by manufacturers that have sold over 200,000 vehicles eligible for the new clean vehicle tax credit?

Yes. As of Jan.1, 2023, the prior sales volume limits no longer apply. This means GM and Tesla vehicles are eligible for the tax credits if they meet the other eligibility requirements.

Can I get the tax credit by leasing a new clean vehicle?

If you lease a vehicle, the lessor (company that maintains the vehicle title) is the original user. This means that they will claim and receive the tax credit, but they can pass it along to the lessee (you, the customer) in your lease payments. When negotiating your lease terms, simply ask if they are willing to lower your deposit or monthly payments in an amount equal to the tax credit. The lessors receive the tax credit through the Commercial Clean Vehicle Tax Credit.

What is a qualified manufacturer?

A qualified manufacturer is a manufacturer that enters into a written agreement with the IRS. A list of qualified manufacturers is maintained by the IRS and can be found here.

How do I know whether my vehicle will be defined as a truck, van, SUV or other type of vehicle for the purposes of the MSRP cap?

The vehicle’s classification will be displayed on the window sticker of the vehicle as well as online. FuelEconomy.gov pre-screens which vehicles are eligible for the tax credit. Visit the site, select the delivery date and it will show you which vehicles are eligible for the credit and how much they are eligible for. It takes the guesswork out of determining vehicle eligibility for the tax credits.

How do I determine if the vehicle I want meets the MSRP cap?

The MSRP is the base retail price suggested by the manufacturer, plus the retail price suggested by the manufacturer for each accessory or item of optional equipment physically attached to the vehicle at the time of delivery to the dealer. It does not include destination charges, optional items added by the dealer, or taxes and fees. The MSRP caps for the new clean vehicle tax credit are as follows:

  • Vans / SUVs / Pickup Trucks – $80,000
  • Other – $55,000

If the vehicle arrives at the dealer and the MSRP on the sticker is below the cap for that vehicle, it should be eligible for the tax credit as long as the other Clean Vehicle Tax Credit requirements are met.

Are the income limits talking about gross income or something else?

The income limits are based on Modified Adjusted Gross Income. According to the IRS, your modified AGI is the amount from line 11 of your Form 1040 plus:

  • Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income.
  • Any amount excluded from gross income because it was received from sources in Puerto Rico or American Samoa.

What if you expect your income to be different this year than last year?

You will qualify based on the Modified Adjusted Gross Income (MAGI) which is the lesser of the two years. For example: You are a single filer and had a MAGI of $145,000 in 2023 but expect to make $155,000 in 2024. The single-filer limit is $150,000. Your MAGI for 2023 is the lower of the two years, and that is what you will use to determine if your income qualifies. Since one of the years is below the $150,000 threshold, your income qualifies for the tax credit.

Which year are the income limits for?

To qualify for the tax credit, your Modified Adjusted Gross Income (MAGI) must be below the threshold amount for the current taxable year or the preceding year. For example, if it is 2024, then you need to meet the income limits in either 2023 or 2024.

Does this guidance apply to when I ordered the vehicle or when I received it?

The guidance applies to the day you receive your vehicle, not when you order it or put a deposit on it. For example, if you ordered your EV in 2023 and you pick it up in May of 2024, you would follow the guidance that applies in May of 2024 when you take delivery of the vehicle.

What time period does the information on this page cover?

This page covers the time period beginning on January 1, 2024, and onward. This guidance and the list of eligible vehicles will continue to change, so check https://fueleconomy.gov frequently. If you received your car before January 1, 2024, find the correct resource page linked at the top of this page.

How much is the tax credit?

The tax credit is made up of two components. The vehicle is eligible for $3,750 if it meets the critical minerals requirements and $3,750 if it meets the battery components requirement. If it meets both of these requirements, it is eligible for a $7,500 tax credit. If it meets one of these two requirements, it is eligible for a $3,750 tax credit. If it doesn’t meet either of these requirements, the vehicle is not eligible for any federal tax credit.

Safety

Do electric cars catch fire more than gas-powered vehicles?

Not at all. Statistics don’t bear that out. Based on the best information available, electric cars pose no greater risk of catching fire than gas-powered vehicles. In fact, electric cars are likely to be less dangerous in terms of fire risk than gas-powered cars, according to the most conclusive and recent report by the National Highway Traffic Safety Administration (NHTSA).

The federal report states: 

“Regarding the risk of electrochemical failure, the report concludes that the propensity and severity of fires and explosions from the accidental ignition of flammable electrolytic solvents used in Li-ion battery systems are anticipated to be somewhat comparable to or perhaps slightly less than those for gasoline or diesel vehicular fuels. The overall consequences for Li-ion batteries are expected to be less because of the much smaller amounts of flammable solvent released and burning in a catastrophic failure situation.”

While electric vehicle fires have captured the headlines, the vast majority of highway vehicle fires are in gas-powered cars, even when correcting for the relative numbers on the road. According to FEMA, from 2014-2016, when less than 1-percent of cars on the road were plug-in electric, “an estimated 171,500 highway vehicle fires occurred in the United States, resulting in an annual average of 345 deaths; 1,300 injuries; and $1.1 billion in property loss. These highway vehicle fires accounted for 13 percent of fires responded to by fire departments across the nation.”

That’s an average of 469 vehicle fires a day, before electric cars were at all common on the road.

Further reading:

Environmental Impact

What about hydrogen cars?

Hydrogen fuel cell vehicles (FCVs) are another alternative to internal combustion engine vehicles but are less than half as efficient as electric vehicles (EVs). Most hydrogen is extracted from natural gas, which, when processed, emits carbon dioxide and methane, according to a 2021 study. Thus, it creates far more greenhouse gas emissions than electricity. FCVs have some engineering challenges to overcome before they will be widely available in the light-duty passenger vehicle market; these include vehicle cost, hydrogen cost, hydrogen storage and delivery, and competition with other technologies such as EVs.  The electrical grid already exists for plug-in vehicles, and current trends show that plug-in vehicles are quickly becoming the dominant alternative to internal combustion engine vehicles.  As of 2021, 10,000 fuel cell vehicles have been sold in the U.S., compared to more than 1.5 million EVs.

Does it make sense to put solar panels or wind turbines on an EV?

Putting solar photovoltaics (PV) directly on EVs would be nice but likely not adequate. Most solar panels would add too much weight. Some newer, lighter, and flexible PV technology could generate power for interior climate control or minor tasks, but not enough to power a car a significant distance. Furthermore, cars are often parked in garages or under carports, where sunlight won’t reach.

Likewise, windmills on EVs don’t make sense. The drag they create reduces efficiency, necessitating more energy to run the car. However, EVs can be charged with electricity that is generated from solar panels and wind turbines.

What about putting stationary solar panels on your house or business? That is a great idea. Fixed panels can be set up so that they’re not obstucted, and angled optimally to the sun. And fixed wind turbines can work wonderfully as well.

Can I charge a plug-in car with solar or wind power?

The cleaner the power, the cleaner the car. Using solar photovoltaics (PV) at your home or business makes even more sense with a plug-in car. The investment in solar panels pays off faster when the solar power is not only replacing grid electricity but also replacing much more expensive gasoline. EVs typically can travel 3-4 miles (or more) per kWh of electricity. If you drive 12,000 miles per year, you will need 3,000-4,000 kWh. Depending on where you live, you will need a 1.5kW-3kW PV system to generate that much power using about 150-300 square feet of space on your roof. Utility credits for the energy generated from solar panels during the day can offset the cost of charging the car at night. If solar PV isn’t feasible at your home, find out if your utility offers a green energy option.

To find a solar installer in your area to provide a free quote on the cost of going solar, see The Solar Nerd.

Will plug-in cars lead to more coal and nuclear power plants?

No. The existing electric grid’s off-peak capacity for power generation is sufficient to power 73 percent of commutes to and from work by cars, light trucks, SUVs, and vans without building a single new power plant, according to the U.S. Department of Energy. The existing nighttime electricity could also be stored in plug-in vehicles and retrieved during peak-demand hours through vehicle-to-grid technology for use by the grid, helping to meet society’s daytime power needs. The U.S. power grid is also getting cleaner every year as affordable renewable energy continues to replace coal plants.

What about overall emissions, including the car and the power plant?

Even today, with about 22% of electricity in the U.S. coming from dirty coal plants, plug-in cars reduce emissions of greenhouse gases and most other pollutants compared with other vehicle types. You don’t need to take our word for it — read the emissions summary of more than 40 studies, analyses, and presentations on this topic. The Union of Concerned Scientists report, Cleaner Cars from Cradle to Grave, also demonstrates that EVs are cleaner than gas cars. EVs also allow you to use 100 percent clean, renewable electricity from sources such as the sun or wind, eliminating greenhouse gas emissions entirely. EVs get cleaner as the electric grid gets cleaner – gas cars only get dirtier.

Can electric car batteries be recycled? Are electric car batteries bad for the environment?

While electric car batteries can be recycled for their raw materials, the market for their direct reuse is rapidly growing, eliminating the need for recycling. In fact, used EV batteries have the potential to provide valuable services to the electric grid. A battery considered to be too degraded for electric vehicle use still has about 75 – 80% of its capacity and can be used for home energy storage or for energy storage applications and grid support.

A 2019 analysis by McKinsey Center for Future Mobility found that reused electric car batteries could replace more expensive gas-powered turbines, allowing utilities more flexibility in how they sell their power.

Hyundai is developing a 1-megawatt-hour energy storage system that is made of used battery packs from its electric cars. BMW is recycling electric car batteries to connect to the UK National Grid.

These pilot projects for electric car battery recycling are proving the value of the EV battery packs after their useful lives on the road. By repurposing electric car batteries for grid, industrial, and home storage, these batteries can continue to support the integration of intermittent solar and wind generating resources, while making the electric grid more efficient and making energy more affordable for all customers.

If reuse is not an option for a particular battery, the majority of the components can be recycled. Lithium, the most abundant material in a lithium-ion battery, is in high demand for laptops and phones and other electronic goods, and a robust market for recycled lithium already exists.

Further reading:

Are electric cars really better for the environment?

Electric cars are better for the environment and for reducing greenhouse gas emissions, wherever they are charged, and however the electricity is produced.

When considering the full life cycle of the vehicle, electric cars are cleaner and greener than their conventional fossil fuel-burning counterparts. While it is true that building an electric car may produce more emissions than a conventional car, mostly due to the energy intensity of battery production, these emissions are dwarfed by those saved over the driving life of the EV. In fact, they are offset in most cases in the first year of driving by emissions reductions from normal operation and use of the vehicle. The evidence has been revealed in a number of rigorous studies.

A life cycle analysis conducted by the Union of Concerned Scientists declared that “the average EV in the U.S. produces less global warming emissions than the average gasoline vehicle. The peer-reviewed literature largely agrees: EVs produce more pollution than gas vehicles in the production of the vehicle, but then save emissions while driving which results in a net savings within the first couple years of driving.”

Every year that the electric grid reduces its reliance on coal power, the relative emissions for EVs are even lower. This handy tool from UCS will show you the respective greenhouse gas emissions of various EV models in any location throughout the country.

This is echoed by conclusive research by Bloomberg New Energy Finance (BNEF), which found that in 2018, carbon dioxide emissions from battery-powered vehicles were about 40 percent lower than for internal combustion engines last year. Even in regions with electric grids most reliant on coal, such as China, EVs were responsible for fewer greenhouse gas emissions.

Another 2018 well-to-wheel analysis by Wood Mackenzie confirmed the UCS research, finding that a typical mid-size EV will generate up to 67% lower greenhouse gas (GHG) emissions than a gasoline internal combustion engine. Even with existing electricity generation mix in developing economies such as China and India, “an EV will displace up to half the GHG emissions of an ICE gasoline car.”

Further reading:

Incentives & Affordability

Are electric cars only for the rich?

No, electric cars are not only for the rich, and in fact there are dozens of models available for less than the average cost of a new car sold in the United States. There is also a rapidly growing used car market for electric vehicles, with many coming off of leases every year.

American car buyers could find at least 22 plug-in models that cost less than the average cost of a new car sold in the United States. According to data from Kelley Blue Book, the average transaction price for a new vehicle is up to $37,851, as of February 2020. The base price of at least 17 models of plug-in vehicles is already lower than that average new car cost, and that’s before including savings from the federal electric vehicle tax credit. Including the EV tax credit, 22 plug-in car models cost less than the average new car sold in the U.S.

The EV tax credit can also be used by the car dealer to lower the base price for a lease. This effectively lowers monthly lease payments into ranges that are comparable—or even lower than—comparable gas-powered vehicles.

On the used car markets, sellers have to “price in” the savings offered by the federal electric vehicle tax credit. Meanwhile, as the vast majority of EVs are leased, an increasing number of leased plug-ins hit the used car market every year, typically at prices well below their gas-powered counterparts.

As Consumer Reports stated back in 2018, “For car shoppers who are interested in trying out electric-vehicle technology but who don’t have Tesla money to spend, now is a great time to buy an emissions-free car for less than $15,000.”

Finally, EVs offer cost savings throughout the life of the vehicle, as they require far less service and maintenance, and are far cheaper to fuel. A 2020 study from Consumer Reports found that total ownership costs of EVs more than make up for any price differential at point of purchase. In other words, it’s cheaper to own/lease and operate an electric car than its gas-powered equivalent.

To find an EV that fits your family’s budget and lifestyle, visit Plug In America’s dedicated EV shopping site: PlugStar.com.

Further reading:

Are electric cars cheaper to drive than gas-powered cars?

Electric cars are cheaper to fuel because electricity is significantly less expensive than gas. EVs also require far less service and maintenance, making them cheaper to drive than their gas-powered equivalents when factoring the total cost of drivership. An authoritative 2020 study from Consumer Reports found that total ownership costs of EVs more than make up for any price differential at point of purchase. In other words, yes, it’s cheaper to own/lease and operate an electric car than its gas-powered equivalent.

Consumer Reports found that typical total ownership savings over the life of most EVs ranges from $6,000 to $10,000, with the exact margin of savings depending mostly on the price difference between the EV and the most closely comparable gas-powered car.

The consumer watchdog group found the following typical savings in operation costs:

  • Fuel savings: “A typical EV owner who does most of their fueling at home can expect to save an average of $800 to $1,000 a year on fueling costs over an equivalent gasoline-powered car.”
  • Maintenance and repair: “Maintenance and repair costs for EVs are significantly lower over the life of the vehicle—about half—than for gasoline-powered vehicles, which require regular fluid changes and are more mechanically complex. The average dollar savings over the lifetime of the vehicle is about $4,600.”
  • Depreciation: All cars depreciate, but EVs depreciate less quickly than fossil fuel cars. “Newer long-range EVs are holding their value as well as or better than their traditional gasoline-powered counterparts as most new models now can be relied on to travel more than 200 miles on a single full charge. As with traditional gasoline-powered vehicles, not all EVs will lose value at the same rate as they age. Class, features, and the reputation of the vehicle’s manufacturer all have an impact on depreciation.”

Further reading:

What is the electric vehicle tax credit?

The electric car tax credit is an incentive created by Congress with bipartisan support during the George W. Bush administration to support the purchase of electric vehicles. It can be claimed on individual tax returns the year the car was purchased, or alternatively can be claimed by the car dealer in order to lower the monthly cost of a leased plug-in vehicle.

According to the U.S. Department of Energy, “All-electric and plug-in hybrid cars purchased new in or after 2010 may be eligible for a federal income tax credit of up to $7,500.” The value of the tax credit varies depending on battery size and starts to phase out to zero over time after each respective manufacturer sells a certain number of plug-in vehicles. *To find the value of the tax credit for each plug-in vehicle on the market today, see FuelEconomy.gov.

Though these are often portrayed as subsidies, Congress defined the tax credit as a tax incentive. Certain states offer rebates as an added incentive, while many others offer their own additional tax credits to be processed on state tax returns.

To utilize the federal EV tax credit, see IRS Form 8936.

Many state and local governments and utilities also offer a variety of EV incentives, including rebates on your vehicle and/or charging station, discounted electric rates, and carpool lane access. To find additional incentives in your area, visit PlugStar.com/incentives. We also recommend contacting your electric utility to see if they offer additional incentives.

Further reading:

Driving Experience

Which electric vehicles can tow?

As of February 2020, the only fully electric vehicles that are recommended for towing are the Tesla Model X and Audi e-tron. There are larger plug-in hybrids that may fit your needs, such as the Mitsubishi Outlander, Subaru Crosstrek Hybrid, and Range Rover PHEV.

With more electric trucks and SUVs launching in the next one to two years, additional options for towing will soon be available.

Is the quiet nature of electric vehicles a hazard?

Electric vehicles aren’t silent, and at parking-lot speeds they make as much noise from various fans, pumps, and tire noise as most modern internal-combustion engine vehicles. At high speeds, the wind and tire noise is comparable to any car.

Can electric cars drive far enough to be practical?

Most new electric cars have a range of 200-400 miles and this is quickly growing. Very few drivers travel this far on a daily basis and most EV drivers plug in their car overnight, allowing you to wake up to a full battery each morning. For the infrequent occasions when a long-distance drive is needed, the drive can be done with DC fast charging along freeways, a second car that is a plug-in hybrid (PHEV), by access to vehicles in car-share services, or by renting or borrowing another vehicle.

Are electric cars better to drive?

Many electric car drivers will report that they offer a more enjoyable driving experience, due to the smooth, quiet ride and instant acceleration. While this is subjective, we can get a clear picture from surveys and polls of EV drivers.

In 2020, AAA surveyed drivers of plug-in cars and asked about their experience and perceptions of driving electric. Their findings reveal drivers who are very happy with electric cars:

  • Three quarters (78%) also have a gas-powered car in the household, yet they report doing a majority of their driving (87%) in their electric vehicle.
  • The majority (96%) say they would buy or lease another electric vehicle the next time they were in the market for a new car.
  • Two in five (43%) say they drive more now than when they owned a gas-powered car. On average, electric vehicle owners drive 39 miles per day.

These results affirm the findings of a 2019 study by IHS Markit, which found increasing EV loyalty rates as more models with longer ranges hit the marketplace.

Further reading:

How long will electric car batteries last?

Most lithium-ion batteries in electric cars are warrantied for at least 8 years or 100,000 miles, but they can last even longer, as much as 10-15 years or more, depending on driving and charging habits. In fact, some electric car batteries on the road today can already last up to 200,000 and even 500,000 miles, according to Coltura.

A 2023 study of 15,000 EVs by Recurrent Auto found that with the exception of a couple of manufacturer recalls, only about 1.5% of the EVs in their sample underwent battery replacements, most of which were covered under warranty. The study also found that most EVs driven around 100,000 miles still had 90% of their original range.

Battery degradation is a natural process in any battery, including those that power vehicles. Degradation permanently reduces the amount of energy a battery can store, or the amount of power it can deliver. The batteries in EVs can generally deliver more power than the powertrain components can handle, so degradation is rarely observable in the driving performance of EVs, but it can impact how much energy can be stored, which directly affects range.

When the time does come to replace an EV battery, they will be much cheaper than they are today. Battery costs dropped 80% from 2010-2019, and are expected to continue to get cheaper.

Further reading:

Are plug-in vehicles reliable?

Though they are still relatively new to the market and buyers have suspicions, electric cars are actually proving to be more reliable than gas-powered vehicles. There is one clear reason why: the drivetrain of a typical gas-powered car has about 200 moving parts, while an electric car has about 20 moving parts. Fewer moving parts means fewer opportunities for things to break down and need repair. An EV has an electric motor instead of an engine; it doesn’t have a transmission system or an exhaust system; it doesn’t require oil or any mechanical fluids.

Electric cars thus require much less maintenance and rarely require service. Tires will still have to be rotated, brake pads replaced, and windshield washer fluid refilled. But other than that, EVs require very little service. The majority of problems that EV drivers face are with technological systems like keyless entry and touchscreens—all issues that new model gas-powered cars deal with as well.

Further reading:

Charging

Will DC fast charging degrade my battery faster?

DC fast charging is slightly more taxing on an EV battery than level 1 (120-volt) or level 2 (240-volt). While all batteries experience some degradation over time, using DC fast charging in moderation is unlikely to have noticeable negative effects on your battery.

Is plugging in a hassle?

Not at all – it takes less than five seconds, and there’s no going out of your way to a gas station,  jockeying for a pump, and getting toxic gasoline on your hands. You can charge anywhere there is an electric outlet. Most EV drivers plug in when they get home.

How do I get a Level 2 charging station installed?

On PlugStar.com/chargers, you can compare charging stations and links to sites where you can purchase. Once you find a charger that best fits your needs, we recommend contracting a licensed electrician to install your charging station.

The licensed electrician will need the model number of your charger and the plug type. This will let the electrician know what amperage panel needs to be installed, to support the power requirements of your charger. Chargers deliver a high level of electricity for many continuous hours every day. Therefore, it is extremely important that it is installed correctly.

Many utilities and state/local governments offer incentives for installing charging stations. Visit PlugStar.com/incentives or contact your local electric utility for more information.

How much does it cost to charge an electric vehicle?

The cost to charge an electric car is significantly less than the cost to refuel a gas-powered car. Generally speaking, powering a car with electricity costs the rough equivalent of paying $1/gallon for gasoline in a conventional car with average gas mileage.

According to the Alternative Fuels Data Center:

The fuel efficiency of an EV may be measured in kilowatt-hours (kWh) per 100 miles. To calculate the cost per mile of an EV, the cost of electricity (in dollars per kWh) and the efficiency of the vehicle (how much electricity is used to travel 100 miles) must be known. If electricity costs $0.13 per kWh and the vehicle consumes 33 kWh to travel 100 miles, the cost per mile is about $0.04. If electricity costs $0.13 per kilowatt-hour, charging an EV with a 200-mile range (assuming a fully depleted 66 kWh battery) will cost about $9 to reach a full charge.

Using a public fast-charger will generally be more expensive because the short time to deliver the charge requires very special equipment. Charging an electric car at home is typically the most affordable option, and costs can drop even more if a customer’s electric utility offers special low overnight charging rates or charging which the utility can curtail for demand response programs.

Further reading:

How long does it take to charge an electric vehicle?

The vast majority of EV charging is done at home, overnight, just like your cell phone, which makes the speed of charging largely irrelevant. That said, there are also tens of thousands of public charging stations across the country, with more being added every day. Many of these are at stores or restaurants, so you can charge while shopping or dining.

There are a few different factors that determine how long it takes to charge an electric car. To be more technical, the time to full recharge depends on:

  • The model of the vehicle and how big the battery pack is
  • The type and “level” of charging station
  • How much charge is left in the battery when it is plugged in
  • The ambient temperature

All told, common electric cars on the market today can take anywhere from 20 minutes to a full day to recharge a fully drained battery—the fastest times delivered by a “Level 3” or “DC Fast Charger” and the slowest by plugging directly into a 120-volt outlet in the wall. (Yes, the same kind you’d plug your cell phone into.)

Gasoline car drivers are used to going to a gas station when their tank is low and filling it up. Because most EV charging is done overnight, though, many drivers will just get a boost from public charging to get them to their next destination, rather than charging to 100%.

Further reading:

How and where do you recharge an electric car?

The majority of EV drivers charge their cars overnight at home in a garage, carport, or driveway. Many take advantage of workplace chargers. There are many public chargers available — and the number is growing every month – but in practice, studies have found that only 5% of EV charging is done at public charging stations. Find a public EV charging station here.

There are three types or “levels” of EV charging. Learn about the levels of EV charging in this guide.

Further reading:

Consumer Reports: How to Charge Your Electric Car at Home
Transport and Environment: Public Charging Report

Electric Vehicle Basics

What is an electric vehicle (EV)?

An electric vehicle is any vehicle that can drive on electricity derived from a power plug. There are two types of EVs:

  • An all-electric vehicle (sometimes called a battery electric vehicle or BEV) drives solely on power from the plug.
  • A plug-in hybrid vehicle (PHEV) takes both electricity from plugging in and gasoline. Usually, they run on electricity first, then gasoline. That way, you can do the majority of daily trips on electricity and use gasoline for longer trips.

A traditional hybrid vehicle converts gasoline into electricity and does not have a plug.

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