India is the fastest-growing and one of the world’s largest auto marketplaces and has a big population with millions of electric vehicle owners. There is a significant impact of environmental consciousness for the transition from gasoline-powered vehicles to electric vehicles throughout the globe and India is leading in the adoption of green fuel energy sources and electrical vehicles.
As per the IEA report, more than 90% of India’s 2.3 million electric vehicles are cheaper and are two & three-wheelers, motorbikes, and E-Rickshaws.
Analysts say that because of last decay’s enormous rise in fuel and consumers’ awareness of cost benefits, the government has announced a $1.3 billion federal plan to encourage electric vehicle manufacturing and to provide rebates for customers.
Have a look at how the government incentives and cost-conscious customers have given a boost to an electric vehicle boom in India:
1. Government Incentives for Electric Vehicles:
Policy Framework:
In the year 2015, the government of India has launched FAME (Faster Adoption and Manufacturing of Electric (& Hybrid) Vehicles scheme. This scheme is to provide incentives for the purchase and usage of electric and hybrid vehicles.
Tax Incentives:
The Indian government has reduced the GST (Goods & services Tax) on electric vehicles as lowered as 5% only whereas the same on gasoline-powered vehicle is 28%.
Charging Infrastructure:
The Indian government is very much focused on creating a robust infrastructure of Electric Vehicles charging systems. The plan is to set up electric vehicles charging stations on highways and within the cities at a regular interval.
State Incentives:
All the states of India have their own policies of electric vehicle and they are offering some additional incentives, subsidies, and extra waivers to both the manufacturers and the consumers. For manufacturers, the state government provides land and electricity at subsidized rates, and for consumers, they may provide rebates in road taxes and rebates in the registration fee of the electric vehicles.
Promotion of Local Manufacturing:
The government has introduced the ‘Make in India’ initiative to support and boost local manufacturing. The goal is to make India a global hub for electric vehicle manufacturing in view of creating jobs for local people and also to reduce production costs.
2. Cost- Conscious Customers:
Lower Total Cost of Ownership:
However, the initial cost of purchasing the electric vehicles are comparatively high, but the total cost of ownership i.e. the cost of fuel, maintenance and other costing for the lifetime of the vehicles are comparatively lower in electric vehicles.
Economies of Scale:
The demand of electric vehicles are increasing day by day and subsequently it results the more production of the electric vehicles. This brings down the low cost of the manufacturing and resulting the lower market price of the electric vehicles.
Increase in More affordable Models:
During the initial stages of manufacturing the electric vehicles, the most available models were only in the premium segments. However, with the increase in demand of the electric vehicles and because of local manufacturing, more affordable models are coming in the market and it is more convenient to select and opt for the customers.
Environmental Awareness:
Swatch Bharat and Clean & Green Movement for pollution-free atmosphere is the major concern of everywhere. The increase in awareness among the consumers about the environment leads to electric vehicles.
Enormous Rise in fuel cost:
The consistent rise in fuel cost i.e. increasing cost of petrol and diesel in the major reason to shift towards alternative fuel and the electric vehicles.
Conclusion:
The collaboration of government policies along with the essential financial and environmental benefits of electric vehicles has created a rapid adoption of electric vehicles in India and even throughout the globe.
If the present trends continues and innovations & the technologies advances then India will definitely see a major transformation in the transportation sector and the automobile market.
The price range of electric vehicles depends on the battery size of the vehicle, the ability of the motors to power the vehicle and increase the range, the charging capability of the vehicle, and other additional features like infotainment or interior and exterior features.
The major factors that can affect the overall costs of owing an Electric Vehicles are:
1. Cost of Electric Vehicles Compared to Gas-Powered Vehicles.
Electric vehicles generally come with a higher price tag than gas-powered vehicles as per your choice of the make and model you want to drive.
However, few small and compact electric vehicles with acceptable range for city driving or small travels usually retail for a lower label price than many gas-powered SUVs or mid-size sedans.
Electric vehicles require less maintenance and no cost of periodic oil changes after every three to five thousand miles as required for gasoline-powered vehicles. However, the electric parts are more expensive to repair or replace in case of wear and tear and accidental damages, though the life of lithium-ion batteries is generally around 10 years. The wheel tires of an electric vehicle are of the same life as those of gas-powered vehicles.
Because of a unique structure and higher cost of repairs of an electric vehicle, the insurance premium cost is greater as compared to the gasoline- powered vehicles.
2.Costs of Powering an Electric Vehicles:
What makes Electric Vehicles so appealing to drivers beyond the eco-accommodating emanations is the capacity to control a vehicle exclusively on electric battery power. Electric vehicles run on the energy produced by an electric engine, which is estimated in kilowatts. Higher kilowatt yields equivalent to more ability to speed up and support the EV.
Like the idea of a gas-powered motor, the more power you feed your vehicle, the more speed and taking care of you get from the vehicle. Rather than searching for an all-the-more impressive motor filled by gas, EVs convey power in light of the vehicle’s battery limit in kilowatt-hours (kWh), which lets you know how much energy a vehicle stores in the battery pack.
3. Basic Charging Costs:
The expense of charging your EV in light of kilowatt-hours will likewise affect the general cost of an electric vehicle. The most costly charge comes from public quick charging stations, however assuming that you plan out your charging timetable to routinely re-energize at your home, you’ll bring about insignificant energy costs.
You can find out about the genuine expense of running an EV in light of the amount it expenses to re-energize the battery. For instance, utilizing a normal 120-volt power source (a similar one you’d use to connect your toaster oven) takes a normal of 40-50 hours to completely charge an electric battery at the most minimal power level. With the typical expense of power at 15 pennies for every kWh, you’re still just paying $7.50 max to charge your vehicle.
Most EVs offer a level 2 charging connector you can equip for your home. These regularly run 240 volts, diverting seriously charging capacity to the battery. Level 2 charges top off your battery power in a normal of 4-10 hours, bringing your costs down to $1.50 or less. Kilowatt-hour rates differ broadly by state, yet utilizing the public typically assists you with computing a good guess of how driving an EV puts on your electric tab.
4. Costs for Fast Charges:
As an EV driver, you are probably spending significantly less to control up as opposed to filling your vehicle. Yet, maneuvering into a quick charging station builds your energy costs.
That is because the advantageous quick charge costs more each kilowatt-hour, frequently twofold or more than the normal cost you would pay at home. For instance, EVgo, from one side of the country to the other, quick charging station, charges non-individuals 34 pennies for each kWh or 29 pennies for fundamental-level individuals in addition to expenses.
To try not to pay something else for a battery re-energize, plan to control up for the time being, saving quick charges for times when it is very important, like startling traffic or during a long excursion.
5. Conclusion:
The electric vehicles are the future of the road conveyance and transportation system. These alternative fuel vehicles are the demand of next generation for a sustainable growth and clean & green environment. Thus people should be come forward to think and adopt the new era vehicles and the electric vehicles are the best option in this way.
The electric vehicles are a little costlier as compared to the gas-powered vehicles but with the innovations and the upcoming developments, the EVs will be more compatible and cheaper with many government incentives and rebates, which are already offered in many states and countries.
Electric Vehicles are the future. As the worldwide community is becoming very aware of the environmental challenges and the sustainable futures. An effort to transition from fossil fuels to sustainable energy sources is rising. The major concern towards a sustainable future is the conveyance systems running on fossil fuels. Electric vehicles (EVs), when seen as innovative ideas, are presently at the very front of this change, ready to reclassify portability for a practical world.
Historical Overview of the Electric Vehicles:
The Origin (1820s-1920s): The concept of electric mobility was initially started during the early 19th century, i.e. by the end of the 1800s, in the country like Europe and the U.S., electric carriages and trolleys were relatively very common, and popular for the mobility.
Decline and Rebirth (1930s-1990s): As the internal combustion engines became governing and dominating the vehicle market, Electric Vehicles faded into anonymity. Yet, the oil crises during the 1970s brought transformed interest in substitutes.
21st Century Revival: With innovative technological advances in batteries and a greater focus on environmental issues, automotive manufacturers like Tesla brought Electric Vehicles back into mainstream discussions.
Technological Advancements for Electric Vehicles:
Battery Technology:The high energy density, long lifespan, and decreasing cost of lithium-ion batteries enable EV manufacturers to rework and do more research for the growth of the electric vehicle market. Even the research for solid-state batteries is in a very advanced stage and this promises even greater efficiency.
Charging Infrastructure: The technological advancement and developments, the establishment of fast charging networks like Tesla’s Supercharger, and many public charging stations have relieved “range anxiety.”
Electric vehicles Charging Points.
Integration with Renewable Energy: The electric vehicles can be linked with renewable energy sources like solar or wind power, which strengthens the sustainability impact.
Environmental Impact:
Reduced Emissions: There is no tailpipe in electrical vehicles as there is no combustion of fuel in the system. Hence, the EVs emit zero tailpipe pollutants, and no air pollution and CO2 emission.
Recycling and Waste: With the increase in the adoption and use of electric vehicles, the recycling and the waste management of batteries are becoming critical.
Current Challenges:
Initial Cost: Despite various tax rebates and price cuts, electrical vehicles are still a costlier affair as compared to traditional gasoline vehicles. However, this is often counterbalanced by lower operating costs.
Energy Sources: The energy sources to charge the batteries of electrical vehicles are either from the coal-burned power plant or from other non-renewable sources. Here the environmental benefits decrease, as these sources create pollutants.
Range Anxiety: This is the major concern of the range; an electrical vehicle goes on a single charge. Many consumers are definitely thinking before going for an electrical vehicle, about how far it will go in a single charge of the battery.
Production Footprint: The manufacturing of batteries for electrical vehicles left a remarkable footprint on the environment.
Future Potential:
Autonomous Driving: There is a belief that the electrical vehicle is tangled with self-driving technology.
Integration with Smart Grids: The electric Grids are becoming smarter and more connected, the electrical vehicles can be used to store or even feedback energy during peak times.
New Markets: With the improved technologies and the better infrastructure, Electric Vehicles have more potential to penetrate the automobile market.
Policy and incentives: In the US, Europe, India, and almost everywhere the governments are giving Tax rebates and other discounts to promote the adoption of electrical vehicles and targeting to phase out internal combustion engine-operated vehicles.
Conclusions:
Electric vehicles can provide a very promising and reliable path to a sustainable future. With the technological growth and drop in purchase prices with the help of government rebates, the common consumers of the sensible society are attracted to EVs. In the global effort towards a sustainable future and pollution-free environment, electrical vehicles will be the major player in the worldwide effort. Whereas Challenges continue, the collective push from industry, policymakers, and consumers suggests a right and electrified road ahead.
If price was the only thing stopping you from buying an electric vehicles this summer, it is time to look again. With smart planning, you can even get the government to pay for part of it with EV tax credits.
Federal EV tax credits are just one factor driving a buying boom this summer. Some cars and trucks also qualify for a state rebate or tax credit. Together, those incentives could cut as much as $15,000 off the price of a new EV. And falling prices and a surge in new models of electric vehicles combine to make this big-ticket purchase less of a splurge.
Adding to the good news, General Motors (GM) just announced in its second-quarter earnings report that it has decided to reverse an earlier decision to end production of the very popular Bolt EV and EUV. GM CEO Mary Barra said GM would reintroduce a new Bolt EV soon, powered by Ultium battery technology. The Bolt has always been one of the most affordable EVs. The Bolt’s MSRP was cut this year to as low as $27,495.
This confluence of financial carrots is why analysts expect record demand for EVs this summer. That will help EVs crack the key level of 10% of all new auto and truck sales in the U.S. later this year.
But do you know how to maximize your electric cars or Electric Vehicles tax credits?
Summer Boom in Electric cars Sales
Electric car sales in the U.S. are already strong. The U.S. ranks third globally in EV sales, after the China EV market and Europe. The U.S. market climbed 55% in 2022, reaching a sales share of 8%, according to the latest Global EV Outlook from the International Energy Agency.
This summer’s popularity of EVs is forceful enough to shift the entire economy. Changes ahead for the global auto industry have major implications for the energy sector, the IEA says. And the electrification trend could reduce the need for 5 million barrels of oil a day by 2030.
IEA Executive Director Fatih Birol said, “Electric vehicles are one of the driving forces in the new global energy economy that is rapidly emerging, and they are bringing about a historic transformation of the car manufacturing industry worldwide.”
EV prices are falling so fast, they’re no longer just a luxury. Kelley Blue Book said last month that the average U.S. price of an electric vehicle in May was $55,488, down from almost $65,000 a year ago. Sales are increasing as prices decline, with May up 4% over April. “April’s downward movement of EV average transaction prices reflects EV automakers, particularly Ford (F) and Tesla (TSLA), seeking a balance between pricing and profitability,” said Michelle Krebs, executive analyst at Cox Automotive.
Electric Vehicles Prices, Tax Credits Power the Switch:
However, lower sticker prices only tell part of the story. U.S. car buyers enjoy other solid incentives to switch to an electric vehicle. They include a federal income tax credit of up to $7,500 for some new EVs. In addition, do not forget added rebates and other benefits from state and local utilities.
While this nest of incentives sounds complicated — and it is — it is also worth thousands of dollars in savings. It is worthwhile to check out eligibility and available perks when shopping for an EV.
Promoting clean energy use was just one facet of 2022’s Inflation Reduction Act. The IRA extended federal EV tax credits for another decade and included eligibility for used EVs. However, it also added complex restrictions such as a price cap, income limitations and final assembly rules.
If you took delivery of a new clean vehicle on or after April 18, 2023, it must meet critical mineral and battery component requirements to qualify for the credit.
If drivers have been reluctant to buy an EV because of high prices, another break is coming. Starting in 2024, taxpayers can transfer the EV tax credit to the dealer at the time of purchase. That will lower the price of the vehicle by the qualifying credit amount.
Who Qualifies For the EV Tax Credit:
You may qualify for an EV tax credit of up to $7,500, according to the IRS, if you buy a new, qualified plug-in EV or fuel cell electric vehicle. The credit is available to individuals and their businesses. To qualify, you must buy it for your own use, not for resale, and use it primarily in the U.S. In addition, your modified adjusted gross income (AGI) may not exceed $300,000 for married couples filing jointly or $225,000 for heads of households. The AGI limit is $150,000 for all other filers.
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. As long as your modified AGI is below the threshold in one of the two years, you can claim the credit. The credit is nonrefundable, so you cannot get back more on the credit than you owe in taxes. Moreover, you cannot apply any excess credit to future tax years.
Vehicles placed in service April 18, 2023, and after must meet all of the criteria listed above. And they must meet new requirements for critical mineral and battery components for the buyer to get an EV tax credit of up to:
$3,750 if the vehicle meets the critical minerals requirement only.
$3,750 if the vehicle meets the battery components requirement only.
$7,500 if the vehicle meets both.
Which New Electric Vehicles Qualify For EV Tax Credits:
#However, that is not all. To qualify, a new vehicle must:
Have a battery capacity of at least 7 kilowatt-hours.
Have a gross vehicle weight rating of less than 14,000 pounds.
Be made by a qualified manufacturer.
Undergo final assembly in North America.
Meet critical mineral and battery component requirements (as of April 18, 2023).
#The sale qualifies for the tax credit only if:
The seller reports required information to you at the time of sale.
The seller reports your name and taxpayer identification number to the IRS.
In addition, the vehicle’s manufacturer suggested retail price (MSRP) cannot exceed:
$80,000 for vans, sport utility vehicles and pickup trucks.
$55,000 for other vehicles.
MSRP is the retail price of the automobile suggested by the manufacturer, including manufacturer-installed options, accessories and trim but excluding destination fees. It is not necessarily the price you pay.
You can find your vehicle’s weight, battery capacity, final assembly location (listed as “final assembly point”) and VIN on the vehicle’s window sticker.
#Used EVs Can also Qualify,
While these rules apply to EV credits for new electric vehicles, Congress threw in another carrot. If you buy a qualified used EV or fuel cell vehicle from a licensed dealer for $25,000 or less, you may be eligible for a used EV tax credit. The credit equals 30% of the sale price up to a maximum credit of $4,000. The credit is nonrefundable, so you cannot get back more on the credit than you owe in taxes. You cannot apply any excess credit to future tax years.
The EV Lease Loophole:
Last year’s IRA placed some new and significant limits on which vehicles qualify for the EV tax credits. The EV has to be built in the U.S., Canada, or Mexico; the battery cells must use minerals from a specific list of countries; and the cells and packs have to be made in the U.S. However, buyers can get federal tax credits for models not on the list allowed by the Inflation Reduction Act if they lease them.
In the IRA, Congress exempted commercial vehicles from the restrictions. While “commercial” is a term usually applied to vehicles like heavy-duty trucks, the Treasury Department defines leased EVs as “commercial” vehicles. Any leased vehicle may qualify for the tax credit because the North American battery-content and manufacturing rules do not apply to commercial vehicles.
When a dealer buys a vehicle and then leases it to a driver, the Treasury says that is a commercial transaction because the driver does not take title. This means the dealer or the finance company holding the lease receives the tax credit. Industry representatives and carmakers say the EV tax credit will help lower the price of leases and increase incentive programs. According to Edmunds, leases reached 34% of total EV sales in March, up from just 18% in March 2022.
“A number of lenders … have offered lease incentive programs. Everyone I have seen has offered it at the full amount,” Andy Koblenz, executive vice president for legal and regulatory affairs at the National Automobile Dealers Association, said at a Federal Reserve Bank of Chicago webinar on EV tax credits. “We’re starting to see it in the marketplace already.” Incentive programs may increase as leasing “will be an attractive way to help get the EVs into the market.”
State EV Tax Credits and Electric Vehicle Rebates:
Some states offer credits or rebates on EV purchases or leases, while utility companies may offer breaks on home charger installations.
Colorado, for example, offers EV tax credits ranging from $2,000 to $8,000 on EV purchases. California’s Clean Vehicle Rebate Project provides rebates from $1,000 to $7,500 for the purchase or lease of new, eligible zero-emission vehicles.
Oregon’s Clean Vehicle Rebate Program is not a tax credit but rather a cash rebate of up to $7,500 on any qualifying purchase or lease. Oregon’s generous rebate program is so popular — it’s handed out $70 million in the past five years — that it is almost out of money and was paused this year. Lawmakers and nonprofits in the state are working to replenish the program’s funding. The Department of Energy’s Alternative Fuels Data Center provides updated state-by-state information on rebates and incentives.
Get Your Federal EV Tax Credit:
If your head is spinning from all the rules but you want to maximize your EV tax credit, Investor’s Business Daily did the work for you. The table below includes all 24 vehicles that qualify for the full $7,500 credit when placed into service on or after April 18, 2023.
It also shows an additional 10 vehicles that qualify for a credit of $3,750. See all the details for various levels of EV tax credits at fueleconomy.gov.
Cars and Trucks That Qualify For The EV Tax Credit:
