Full tax credits are offered to the first 200,000 new PHEV and EV buyers.
Toyota expects to reach the limit before the end of June.
Tesla and General Motors have lots to say about the 200,000-unit cap on Federal tax credits. As front-runners in the switch to electrification, they’ve both run out of credits and soon, Toyota will also.
The EV credits have helped increase interest in electric vehicles and have benefitted buyers over the years, but all good things must come to an end. Toyota’s cap will have been reached by selling the PHEV RAV4 Prime and Prius Prime. The downer for the Japanese automaker is that they are about to launch their new all-electric bZ4X. And when it does arrive, federal EV tax credits will have dried up.
As reported by AP News, the Build Back Better spending bill, which is backed by President Joe Biden, is stalled in Congress. It would reinstate the $7,500 credit into 2026. From 2027 however, the plan would see only US-made EVs eligible for the full credit. Furthermore, if the vehicle is made at a U.S. plant that runs under a union-negotiated collective bargaining agreement, an extra $4,500 will be added to the total.