Many states also offer incentives to buy EVs and hybrids

ConsumerAffairs

Connecticut matches the federal rebate of $7,500

The U.S. government really wants you to buy an electric vehicle (EV). That’s why it is offering a $7,500 tax credit for the purchase of some EVs.

But a number of states also offer some financial incentives, including state tax credits, on the purchase of an EV. If you happen to live in one of those states, an EV might be more affordable than you think.

For example, Washington is launching incentives, including rebates and sales tax exemptions if you purchase a new or used EV. It also applies to plug-in hybrids. Rhode Island is handing out rebates for eligible new battery or plug-in hybrids. Massachusetts also provides EV tax rebates.

Connecticut offers up to $7,500 in tax credits through the Connecticut Hydrogen and Electric Automobile Purchase Rebate program when they buy or lease an eligible battery electric, plug-in hybrid electric, or fuel cell electric vehicle.

New York recently launched an incentive program called "Drive Clean" that offers rebates of up to $2,000 on EV purchases or leases. There’s a new proposal in New Mexico to offer a $3,000 tax credit on new EVs, $1,500 for used ones, and $2,000 for new hybrid cars from 2024 through 2026. 

Pennsylvania residents who meet eligibility requirements can qualify for a rebate of up to $3,000 on the purchase of a plug-in hybrid and an electric motorcycle. In neighboring New Jersey, the state tax credit is as much as $4,000.

Tax breaks

Other states are offering encouragement by not taxing your EV, or at least not as much as other vehicles.

The District of Columbia offers a reduced auto registration fee for the first two years of owning a hybrid or EV. Some Florida residents may get a $50 gift card from the Orlando Utilities Commission just for test-driving an EV.

Some states actually charge motorists more if they own an EV or hybrid. That’s because a lot of state revenue for road maintenance comes in the form of the gasoline tax. State bean counters figure that if you aren’t buying as much gas, you’re shortchanging the state, so they charge an extra fee.

But a number of states don’t charge that extra fee. In addition to the states listed above, here are the states that don’t impose an extra registration fee on EVs:

  • Alaska

  • Arizona

  • Delaware

  • Maine

  • Maryland

  • Montana

  • Nevada

  • New Mexico

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