California & U.S. Incentives

Businesses and tax-exempt organizations that buy a qualified commercial clean vehicle may qualify for a clean vehicle tax credit of up to $40,000 under Internal Revenue Code (IRC) 45W. The credit equals the lesser of:

• 15% of your basis in the vehicle (30% if the vehicle is not powered by gas or diesel)
• The incremental cost of the vehicle

Qualified vehicles with gross vehicle weight ratings (GVWRs) of under 14,000 pounds have a maximum credit of $7,500.

Plug-in electric vehicles must draw significant propulsion from an electric motor with a battery capacity of at least:

• 7 kilowatt hours if the gross vehicle weight rating (GVWR) is under 14,000 pounds
• 15 kilowatt hours if the GVWR is 14,000 pounds or more

The Inflation Reduction Act introduces a number of significant changes to the tax credit for new electric vehicles (section 30D). Overall, the reforms in the Inflation Reduction Act mean that the tax credit for electric vehicles will evolve considerably over the coming months and years.

New Vehicle Clean Credit up to $7,500.
You may qualify for a credit up to $7,500 if you buy a new, qualified plug-in EV. The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032. Information about new vehicles purchased in 2022 and before or for vehicles purchased in 2023 and after.

Used Vehicle Clean Credit up to $4,000.
Beginning January 1, 2023, if you buy a qualified used electric vehicle (EV) from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit. The credit equals 30% of the sale price up to a maximum credit of $4,000. Additional Details.

The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.

The California Clean Fuel Reward Program amount will be temporarily reduced to $0 as of September 1, 2022. The reward can be offered on sales of eligible vehicles through August 31, 2022. All claims must be submitted by October 15, 2022, for reimbursement. No exceptions will be allowed.

The program will continue to be monitored and restored if/when conditions change.

The reward is available to all California residents who purchase or lease an eligible vehicle through a participating retailer. There are no income or location restrictions within California, but the vehicle must be registered in the State of California.

The Clean Vehicle Rebate Project (CVRP) offers up to $7,000 in electric vehicle rebates for the purchase or lease of new, eligible zero-emissions and plug-in hybrid light-duty vehicles.

The CVRP is administered throughout the state for the California Air Resources Board, part of the California Environmental Protection Agency.

It’s not only about having a home, it’s about building the foundation to help you succeed. Driving Clean Assistance Program (DCAP) provides grants of up to $5,000 along with low-interest car loans to low-income individuals and families who need reliable clean transportation.

The DCAP is providing grants for clean vehicles in all Bay Area counties, Sacramento, Santa Cruz and Yolo.

The Bay Area Air Quality Management District is administering a Clean Cars for All program that provides grants for income-qualified Bay Area residents to retire their older car and replace it with a hybrid, plug-in hybrid, or battery electric vehicle, or to get a Clipper Card for public transit.

The program is supported by the California Climate Investments program, a statewide initiative that addresses climate change by reducing greenhouse gases and improving air quality.

Income-qualified customers may qualify for a cash grant of $5,000 toward the price of a new or used BEV, PHEV or hybrid vehicle, along with affordable financing, in this statewide program aimed at making clean vehicles accessible and affordable. You can also receive up to $2,000 toward a home EV charger.

The Consumer Assistance Program’s (CAP) vehicle retirement option offers eligible consumers an incentive to retire their operational vehicle. Consumers meeting the income eligibility requirement may receive $1,500 for each vehicle retired. All other vehicle owners may receive $1,000 to retire their vehicle at a BAR-contracted dismantler.

The Bay Area Air Quality Management District offers eligible applicants $1,000 to take their operating and registered vehicle off the road. Vehicle must be a 1996 or older model and must have passed its most recent smog check inspection.

Contact: Environmental Engineering Studies, Inc. at 1-855-343-7314

The Clean Air Vehicle (CAV) Decal Program is administered by the Department of Motor Vehicles (DMV) in partnership with the California Air Resources Board (CARB). The program authorizes a vehicle that meets specified emissions standards to be issued a CAV decal to allow single occupancy use of High Occupancy Vehicle (HOV) or carpool lanes.

The CAV Decal Program is subject to authorization by the Federal Highway Administration. If federal authorization is withdrawn, the program may end sooner than specified in state law.

Eligible clean air vehicles (CAVs) with valid clean air vehicle decals can travel toll free or at a discounted rate on Bay Area express lanes and state-owned bridges (not including the Golden Gate Bridge). In order to receive the correct discount, eligible clean air vehicles should use a FasTrak Flex or FasTrak CAV toll tag.

Consumers who purchase qualified residential charging equipment may receive a tax credit of 30% of the cost, up to $1,000.