Electric vehicles have recently become a popular choice among car buyers, with EV sales increasing by nearly 50% over the past year, according to Kelley Blue Book.
Some car buyers choose EVs because they want to own a car that is more environmentally friendly than a gasoline car. Meanwhile, some people are considering purchasing an EV thanks to expanded and renewed tax credits.
Let’s take a quick look at the environmental and personal financial impacts of purchasing an EV.
Yes, EVs are environmentally friendly
This may not come as much of a shock, but the latest research shows that EVs emit far fewer emissions than gasoline-powered cars. Of course, EVs themselves do not cause air pollution, but the electricity generated to charge them can emit carbon dioxide.
Because the United States uses a combination of coal-fired and renewable energy power plants, some EV charging may have an environmental impact. According to a recent article, new york timesIn most cases, EVs have a much lower carbon footprint than gasoline cars.
But it depends on where you live and the car you have. For example, some EVs that are charged every night in areas of the country that rely heavily on coal-fired power plants can actually cause more carbon emissions than owning a gasoline or hybrid car. says the article. In other words, the cleaner the power grid, the cleaner EVs will be.
There is also the issue of EV raw materials such as lithium and cobalt. The mining and smelting processes for materials can produce hazardous substances, and some production takes place in parts of the world with little regulation.
Finally, some EV batteries can be recycled, but there is no good system for doing so. Currently, an estimated 5% of all lithium-ion batteries (including those used in high-tech devices) are recycled.
But the Environmental Protection Agency says that while all of these factors need to be improved, electric cars are almost always better for the environment.
EVs aren’t good for your wallet, but there are some incentives
If you’re looking to buy a new car, you may be able to buy a gas-powered car for less than an EV. According to Kelley Blue Book, the average transaction price for a new gasoline-powered car in September was $47,889, while the average price for an EV was $50,683.
However, there are currently some important EV incentives that can reduce costs. Here’s what you need to know:
- Tax deduction: In 2023, you could receive up to $7,500 for a new EV and up to $4,000 for a used EV. You can use this IRS form to apply for this credit.
- Incentives may be easier to obtain in 2024. The U.S. Treasury has proposed allowing EV buyers to receive a tax credit as an over-the-counter discount at dealerships, potentially making it easier to qualify for the tax credit next year.
- Low- and moderate-income EV buyers may want to wait. Next year, those who pay less in taxes compared to this year’s adjusted amount may be able to receive the full tax deduction. This change could make EVs more affordable to more buyers in 2024.
- Not all EVs are eligible for credits. To qualify for the credit, EVs are subject to certain manufacturing restrictions. A complete list of eligible vehicles can be found in The Ascent’s EV Tax Credit Guide.
Given the current incentives, now could be a great time to buy an EV, whether you’re buying for the environment, want to save money on gas, or just think it’s cool. (a perfectly fine choice, I might add).
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