There are currently plenty of great deals on used electric cars. The little-used Tesla Model S sedan trades for the price of a Model Y. The Subaru Solterra is available for around $20,000. Low mileage Lucid Air is half price. All in all, there’s never been a better time to work on a budget.
But if you wait until early next year, things will be much, much better. More EVs will be eligible for the federal Used EV Tax Credit in January. According to a study by battery health startup Recurrent, “January of this year will see the largest influx of EVs into the used market on record.”
The company, which tracks the condition of batteries in used EVs, says 65% of EVs on the used market are already old enough to qualify for credits. With strong electricity sales in 2023, an additional 24% will meet that requirement on January 1st. You can get the 2023 Chevrolet Volt for just over $10,000.
Let me backtrack here. The $4,000 Used EV Tax Credit, passed as part of the Inflation Control Act of 2022, applies to vehicles with model years that are at least two years older than the calendar year in which the vehicle was sold. When the program launched on January 1, 2023, vehicles up to the 2021 model year were certified. This year, the selection has expanded to include the 2022 model year. Then, come January, 2023 model year EVs and plug-in hybrids will become eligible.
This is huge. Sales of new EVs have increased dramatically in recent years and will continue to do so. Therefore, on January 1st of each year, the range of EVs eligible for credit will be significantly expanded.
In 2023, EV sales in the United States will exceed the 1 million mark for the first time, reaching 1.2 million. This will increase from 800,000 in 2022 to less than 500,000 in 2021.
Currently, not all 2023 EVs qualify immediately. Used cars must also cost less than $25,000. Buyers must meet income limits of $75,000 for individuals, $150,000 for couples, and $112,500 for heads of households. And the car must be sold by a dealer, not an individual.
If you meet all of these requirements, you’ll receive a credit of $4,000 or 30% of the vehicle price, whichever is lower. Importantly, the tax credit for both new and used EVs is now available as an upfront discount, rather than as a refund at tax time.
Still, many 2023 EVs currently on the market are priced well below that $25,000 cap, suggesting there could be some great deals in early 2025. . I see lots of low-mileage Chevrolet Bolt EV hatchbacks and Bolt EUV crossovers for sale online for around $15,000. -$17,000. If you do the math, an EV with plenty of range that might be less than two years old after it was first launched will only have a take-home price of $11,000 to $13,000. There’s also a Nissan Leaf hatchback at the stadium.
As you move your budget up into the $20,000 to $25,000 range, larger crossovers like the 2023 Subaru Solterra, Toyota bZ4X, and Kia Niro EV also become an option.
Liz Najman, director of market insights at Recurrent, notes that these prices may change once credits are applied. Some of the asking prices may increase to account for the new discounts, he said. But the opposite is also true, which is good for buyers. Najman said the 2023 car, which currently sells for just over the $25,000 cap, could be a little cheaper.
Contact the author: tim.levin@insideevs.com
