Up and Down Effect on EV Sales From the Phase Out and Loss of Federal Tax Credit

Share on twitter
Share on linkedin

There are lots of factors affecting sales of individual EV models in the US – range, cost, brand, attractiveness, access to fast charging networks, competitive models, and more. In my latest EVAdoption analysis, the US federal EV tax credit in my opinion has NOT had a significant impact on EV sales – except during the quarters preceding a reduction/or loss entirely of the credit.

In the chart below (article coming soon that includes analysis on the Tesla Model 3) you can see that sales of the Chevrolet Bolt have gone up and down – but have actually been higher in several quarters when the federal EV tax credit declined or ended entirely. The credit’s biggest impact is in the quarters before it declines. In Q4 of 2018, one quarter before the full $7,500 credit was cut in half, the Bolt had its third highest quarterly sales in its history. And Q1 2020, the final quarter with any tax credit amount ($1,875), the Bolt had its highest sales since Q4 of 2017.

Overall, the tax credit is hugely flawed and has had minimal impact on increasing EV adoption in the US. We’ve gone from 0% EV share of new vehicle sales in 10 years of the tax credit to ~2.5%. It is time to not just tweak but to blow up the mess that is the federal EV tax credit.  



Average Range and Battery Size of PHEVs Currently Available in the US

With 32 PHEVs currently available in the US (as of September 21, 2021), they come in a wide variety of types, price, EPA range, and battery size. In the chart below we’ve analyzed the 32 PHEVs across 6 metrics. The mean (commonly referred to as the average) range is 24.7 miles and mean battery size is 13.5 kWh. When looking at the median, however, range drops to 21 miles and battery size down to 12.5 kWh.


PHEVs Account for Nearly 37% of EVs Sold to Date in the US

Through April 2021 PHEVs accounted for 36.7% of EVs (BEV and PHEV) sold in the US since January 2011. And in California, the most EV-centric state in the US, PHEVs comprise a slightly higher percentage of EV registrations to date at 38.3%.

PHEVs with 16 kWh or larger battery qualify for $7,500 tax credit

Six PHEVs Currently Qualify for the Maximum $7,500 Federal EV Tax Credit

There are six PHEVs that currently qualify for the $7,500 maximum tax credit, and their electric range is from a low of 21 miles for the Jeep Wrangler 4xe to a high of 65 miles for the Polestar 1. They also range in MSRP from about $38,000 for the Toyota RAV4 Prime to $165,000 for the Polestar 1. 

Leave a Reply

Your email address will not be published. Required fields are marked *