US Tax Incentives for Plug-in Hybrids and Electric Cars

The new shape of the green car incentive landscape tilts toward plug-in hybrids and electric cars. And the incentives are much more generous than they were for hybrid gas-electric cars. Start with the US federal tax incentives listed below, and then check out our state-by-state regional incentives list to see if your local government will help even more. Now, we just need cars to arrive in dealerships.

Consider this a good start. We will continue to add detail as the incentives roll out and the cars go on the market.

New Plug-in Car Purchases

Buyers of plug-in hybrids and electric cars benefit from a tax credit of $2,500 to $7,500, depending on the size of the battery in the car. On the low end of the spectrum, cars with 4 kWh battery packs will qualify for a $2,500 tax credit. The credit maxes out at $7,500 for cars with a 16 kWh battery pack, like the Chevy Volt. The credits were provided as part of the American Recovery and Reinvestement Act, otherwise known as the “stimulus bill.” The incentive begins phasing out after an automaker sells 200,000 vehicles that are eligible for the credit.


Drivers converting a car into a plug-in hybrid, or a gas-powered car into an electric vehicle, will receive a tax credit equal to 10 percent of the conversion cost. The maximum credit is $4,000 for a $40,000 conversion. These credits are only available until December 31, 2011. Individual states, such as Colorado and Florida, provide additional incentives, such as rebates and state tax credits.

Charging Equipment

The federal government offers a tax credit equal to 50 percent of the cost to install a home-based charging station—with a maximum credit of $2,000 for each station. Business quality for tax credits up to $50,000 for larger installations. The cutoff is abrupt—installations must happen before the end of 2010. The equipment must be approved, but no official list of approve equipment has been issued.

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  • jaber

    I Need informeshin aboute electric car . would you maind helping me or introduce me some web saite

  • Cat Peters

    Please inform me of 2011 state & national alternative automobile incentives -rebates, credits…

  • crazydiamond23

    Read the following………
    “By keeping mileage standards for SUVs lower than for cars, allowing unconscionable fuel efficiency loopholes that exempt monster trucks like the Hummer H2, and giving a special tax break allowing write-offs up to $100,000 on luxury SUVs, they helped create an artificial market for gas guzzlers–and helped lead GM to the corporate ICU.” This was in reference to the Bush administration. Can you imagine how many hybrids Obama could put on the road if he would push for an incentive even remotely close to the Bush plan? How about a 25% rebate on ANY hybrid vehicle and let’s see what the market does? I bet you’ll see a mad rush if the Feds can help get the cost of hybrids below $20,000.

  • Davis Bethel

    Are there any government tax incentives out there to install electric car charging stations at commercial properties?