Growing Appeal: Dealers Embrace 2024’s IRA EV Tax Credits

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US Treasury Department: more auto dealers are interested in the point-of-sale electric vehicle tax credit. The November 2023 plan allows auto dealers to receive direct tax credit payments, giving customers prompt rebates at purchase. This strategy is expected to boost vehicle dealerships, according to the Biden administration.

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IRA’s New Clean Vehicle Credit: Instant Rebates at Point of Sale Gain Momentum

Starting January 1, 2024, individuals can transfer up to $7,500 in new clean vehicle credit and $4,000 in previously owned clean vehicle credit to a licensed car dealer. This Inflation Reduction Act (IRA) feature allows consumers to put a down payment on a clean vehicle during the sale rather than waiting to receive the credit on their tax return the following year. This advantage is only available for consumer clean car credits, according to the US Treasury.

About 7,000 auto dealers have enrolled in the point-of-sale electric vehicle tax credit by early December 2023. Another 400 dealerships joined by December 2023, bringing the total to 7,400. After the campaign launched on January 1, 2024, over 1,000 auto dealers joined. Over 8,700 dealers participated in the project as of January 5, 2024, reports the US Treasury.

The US Treasury and IRS created the IRS Energy Credits Online (ECO) platform to help dealerships implement the instant rebate effort and receive direct tax credit payments quickly. Auto sellers must declare time-of-sale within three days. The IRS extended the deadline for these reports to January 16, 2024, giving dealerships time to learn the IRS ECO interface.

READ ALSO: Tesla looks to eliminate bankruptcy as savior for past whistleblower

Biden’s EV Tax Credits: Dealers React to Direct Payment Plan Despite Industry Concerns

Around the same time, the Biden administration unveiled the direct tax credit payments plan for auto dealers, and over 3,000 dealerships wrote to President Biden expressing a decrease in EV interest. The letter stated that electric car sales have disappointed despite initial eagerness and hope.

However, dealerships seem amenable to selling electric vehicles, with the direct tax credit payments plan possibly impacting their choice to continue advertising and selling EVs, addressing consumer impressions of EV affordability addressed in the letter.

READ ALSO: IRA EV tax credits winning over more auto dealers in 2024

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