Government Electric Vehicle Incentives and Tax Breaks in US and Canada

A major barrier to widespread EV adoption is the lack of charging infrastructure. Installing EV chargers at home or in public spaces requires significant upfront investment. To accelerate the transition to EVs, federal, state/provincial, and local governments in the US and Canada offer various incentives and tax breaks to offset the costs of installing EV charging equipment. This article provides a comprehensive review of the policies, programs, and funding available for EV charging infrastructure.

Federal EV Charging Incentives in the US

Tax Credits for EV Charging Equipment

The recently passed Inflation Reduction Act has revived federal tax credits for installing electric vehicle charging stations from 2023-2032. For individuals, there is now a 30% tax credit on the cost of hardware and installation up to $1,000 for chargers installed at their primary residence. 

Businesses can also receive a tax credit on charging stations, up to 30% of the cost and $100,000 per charger, if they are located in designated census tracts and meet prevailing wage standards. 

To claim the credit, taxpayers must file IRS Form 8911 when filing their taxes. However, the federal credit has limits – it is only available in rural and low-income areas, so the maximum credit will likely be less than the $1,000 cap for individuals. 

Many states and utilities also offer additional rebates and incentives for home EV chargers, sometimes up to several hundred dollars. The federal government and automakers have also proposed more large-scale investments in public EV charging networks starting in 2024.

EV Charging Grants

The Bipartisan Infrastructure Law allocates $7.5 billion for EV charging infrastructure, including $5 billion for the National Electric Vehicle Infrastructure Formula Program, which issues grants to states to build public charging networks. 

States draft EV infrastructure deployment plans and can receive funding covering up to 80% of costs. The law also provides $2.5 billion for local EV charging grants, including funding for charging at public buildings, schools, and highways. The Department of Transportation is currently developing guidance for these competitive grant programs.

State EV Charging Incentives in the US

1. California

California offers very robust support for electric vehicle (EV) adoption through numerous financial incentives and laws. Some of the key programs include:

• Up to $7,000 rebates for purchasing new EVs through the Clean Vehicle Rebate Project, with income caps applied. 
• The California Electric Vehicle Infrastructure Project (CALeVIP) provides sizable incentives of up to $80,000 to install fast DC chargers in public locations to build out the necessary charging infrastructure.
• Low-interest loans are also available through the EV Charging Station Financing Program to help more properties like workplaces, apartments, and public sites install EV charging stations. 
• The California Green Building Standards Code further streamlines the permitting process for homeowners who want to install personal chargers.

2. New York

New York also offers a number of attractive incentives to promote electric vehicle adoption, such as:

• Individuals can receive rebates of up to $2,000 when purchasing a new EV through the Drive Clean Rebate program. 
• Vouchers up to $100,000 through the Truck Voucher Program for commercial EV fleets to buy electric trucks and install charging equipment.
• Under the Charge Ready NY initiative, public and workplace charging station operators are eligible for rebates of up to $4,000 per charging port to help expand the availability of Level 2 and DC fast charging infrastructure. 
• Major utilities in the state, like Con Edison, offer reduced electricity rates for EV charging stations to help lower operating costs. 
• New York also exempts EV charging stations from sales tax to eliminate this barrier and incentive their growth across the state.

3. Massachusetts

Massachusetts offers several incentives to promote electric vehicle adoption, such as:

• Rebates up to $2,500 for buying or leasing a new EV under the MOR-EV program.
• Grants cover 80% of costs to install publicly accessible DC fast charging stations.
• Workplace charging grants up to $25,000 through the MassEVIP program.
• EV charging stations are exempt from state sales tax.
• EV drivers have access to HOV lanes on state highways.

4. Colorado

Colorado provides numerous grants to enhance the adoption of electric vehicle, such as:

• Grants covering 80% of costs for DC fast charging plazas under Charge Ahead Colorado.
• Workplace and fleet charging grants up to $9,000 and $50,000 respectively.
• EV tax credits up to $4,000 for purchases or leases.
• State income tax credit up to $2,500 for installing home EV charging equipment.

5. New Jersey

New Jersey has also provide rebates, such as:

• Rebates up to $5,000 for buying or leasing a new EV under the NJ ZIP program.
• Tax credits for businesses installing workplace EV charging stations.
• Sales tax exemption for EV charging equipment.
• No sales tax on new EV purchases.

6. Washington

Washington offers:

• Up to $2,500 in sales tax exemption when purchasing a new EV.
• Rebates up to $1,000 for installing home EV charging equipment.
• Businesses receive tax credits for installing EV charging stations.
• Sales tax exemption for EV batteries and labor for EV conversions.

7. Oregon

• Offers rebates up to $2,500 for purchasing new EVs through the Oregon Clean Vehicle Rebate Program.
• Businesses receive tax credits up to 35% of project costs for installing EV charging stations, capped at $2 million.
• EV charging stations are exempt from state and local parking fees.

8. Utah

•  Provides a tax credit of up to $750 for installing residential EV charging equipment.
•  EVs are exempt from state emissions testing requirements.

9. Arizona

• Offers tax credits up to $4,000 for installing EV charging equipment at residences and businesses.
• EVs are exempt from emissions testing requirements in counties that require it.

10. Indiana

• The Volkswagen Environmental Mitigation Trust Fund provides grants to install EV charging infrastructure.
• EVs are exempt from state emissions inspection requirements.

11. Virginia

• Offers rebates up to $3,500 for purchasing or leasing new EVs under the Virginia Clean Vehicle Rebate Program.
• EVs are exempt from state safety inspections.

12. Maryland

• Provides excise tax credits up to $3,000 for purchasing new EVs.
• Offers a tax credit of up to $700 for installing home EV charging equipment.

13. Illinois

• Offers rebates on EVs purchased before July 2026, ranging from $1,500 to $4,000, depending on the model.
• Provides grants to support EV charging infrastructure buildout.

14. Pennsylvania

• Offers rebates up to $2,000 for purchasing new EVs through the Driving PA Forward program.
• Provides grants to support EV charging station installation costs.

15. Florida

• EVs are exempt from state emissions testing requirements.
• Commercial EV charging equipment is exempt from sales tax, up to $60,000 in value.

In summary, strong state incentives like purchase rebates, charging grants, tax credits and exemptions can greatly reduce upfront costs for EV buyers and businesses investing in charging infrastructure. 

Provincial EV Charging Incentives in Canada

1. British Columbia

British Columbia residents can receive rebates of up to $350 for installing Level 2 home EV chargers. Under the CleanBC Go Electric Public Charger Program, businesses, local governments, First Nations, and non-profits can apply for funding covering up to 80% of the costs to install Level 2 or DC fast chargers accessible to the public.

2. Ontario

Ontario provides rebates of up to $600 for installing Level 2 EV chargers in homes, workplaces, and multi-unit residential buildings. The Ontario Electric Vehicle Chargers Ontario program offers incentives up to $5000 per charging port for DC fast chargers installed by businesses and public organizations. 

3. Quebec

Quebec’s Roulez vert program provides rebates of up to $600 for home EV chargers. The Electric Circuit program offers grants covering 50% of equipment and installation costs for public DC fast chargers.

4. Nova Scotia

Efficiency Nova Scotia’s EV Charger Incentive Program offers rebates of up to $500 for installing Level 2 home EV chargers. Businesses and organizations can receive incentives up to $5000 per connector for Level 2 and DC fast chargers under the Public Charger Incentive Program.

Key Considerations for EV Charging Incentives

Here are some key things to keep in mind when exploring incentives and tax breaks for installing electric vehicle chargers:

• Incentive amounts and eligibility requirements vary significantly by location, so thorough research on available options is important.
• Apply for incentives well in advance since demand often exceeds funding availability.
• Incentives typically cannot be combined or stacked, so choose the optimal program for your specific needs.
• Work with utilities early in the planning process to understand grid capacity limitations at potential charging sites.
• Charging equipment must meet technical specifications mandated by local authorities to qualify for available incentives.
• Publicly accessible chargers must be ADA-accessible to comply with disability standards.

Take Away

The federal and provincial governments in Canada and the United States offer various incentives and tax credits to support the adoption of electric vehicles and the buildout of EV charging infrastructure. These incentives help reduce the upfront cost barriers for individuals and businesses transitioning to EVs.

Some key takeaways on EV incentives in Canada and the US:

• Purchase rebates up to $8,000 are available for EVs in Canada and up to $7,500 in the US, making new EVs more affordable.
• Tax credits, grants, and rebates are offered for installing home, workplace, and public EV charging stations in many provinces and states. These help offset equipment and installation costs.
• Businesses can benefit from tax credits, grants, and sales tax exemptions when investing in EV fleets and charging infrastructure.
• The US has more generous uncapped federal incentives for EV manufacturing and charging networks under the Inflation Reduction Act compared to Canada.
• Canada still lags behind the US in production tax credits and contracts for difference to incentivize clean energy projects long-term.
• However, budget 2023 introduced major new Canadian investment tax credits for clean electricity generation, storage, transmission, and hydrogen production.

Overall, incentives in Canada and the US are accelerating EV adoption and charging infrastructure growth. Canada made significant strides with the new budget but still has ground to cover to match the scale of US incentives. However, continued collaboration between government and industry will be key to optimizing policies and driving the transition to EVs.