Incentives for electric vehicles

You probably know there are federal tax incentives for electric vehicles. You may also know they're incredibly complicated and vary widely from one model to another, sometimes even between two examples of the same model.

The essential thing to know is that you can get a tax credit of up to $7,500 off an EV. Thanks to new rules, just like a factory rebate, that amount can be applied directly to your new vehicle purchase.

If you really want to purchase your new EV, that incentive is for a relatively small number of models and households below certain income levels. (You can get more details on specific vehicles from the IRS.) If you choose to lease, though, most of the restrictions are removed, and the $7,500 federal incentive can be used to lower your monthly lease payment. 

State Incentives

The state of New York also offers incentives "up to $2,000" for new electric vehicles. This is also treated as a rebate and provided at the time of sale, but it's available only from "participating dealers. " So check before you buy, but most dealerships seem to be participating.

Because of restrictions on vehicle driving range and price, most EVs are eligible for a much lower $500 incentive.

It's mostly the price that's the issue. To qualify for the full $2,000 incentive, a vehicle must have an all-electric driving range over 200 miles—pretty common these days—and a base MSRP, or manufacturer's suggested retail price, below $42,000.

Low price and long driving range rarely come together, but according to the New York State Energy Research and Development Authority, some new EVs do qualify for the full $2,000 amount. These include the Chevrolet Equinox EV, pictured above, and the least expensive versions of the Ford Mustang Mach-E, the Hyundai Ioniq 5 and Ioniq 6, the Kia EV6, and the Volkswagen ID.4.  These specific extra-cheap versions may be hard to find at dealers, though.

It's not only fully electric vehicles, though. Many plug-in hybrids are also eligible for a $500 incentive from New York State and significant incentives from the federal government.