Electric vehicle and plug-in vehicle prices soar as they are not eligible for the federal EV tax credit known as “the Clean Vehicle Credit”. Additionally, it was noted that the lease payment on Toyota BZ4X electric car was increasing by $100 a month. It was the result of pulling its incentives on EVs.
The hike may be most pronounced though for Toyota’s in-demand RAV4 Prime and Prius Prime. As we see at the time of writing, Toyota’s lease “deal” pricing on the RAV4 Prime, which up to Tuesday qualified for the full $7,500 EV tax credit amount, has risen to $643 a month with $4,293 due at signing ($2,000 down). Until recently, the same lease terms had been running $490/month, with $3,140 due at signing—so nearly $7,000 more for the customer to pay over the course of the lease.
In Los Angeles, their lease deals on EVs tend to be on the lower side, the going official Toyota lease price of the BZ4X is now at $745 a month with $3,395 due at signing. A Tesla Model Y Long Range, which stickers far above the BZ4X, starts at $789 a month to lease, with $4,500 down. Tesla hasn’t worked around the tax credit in several years, and this currently looks to be to its advantage; you have to really want the BZ4X to pay the same money.
Tesla and GM vehicles will be able to once again be eligible for the revised tax credit starting in 2023, if they meet the cut on a number of other stipulations in the bill, including an $80,000 price cap for SUVs, pickups, and vans, and a $55,000 cap for cars. Toyota’s lease deals are regional, but it appears that special lease programs for both EVs and plug-in hybrids were removed “pretty much everywhere overnight.”
The reason comes down to simple math: Automakers’ captive finance companies were able to claim the EV tax credit and write it into the cost of the lease—effectively lowering the amount of the entire lease amount from the start. So now it appears they’re merely passing the vast majority of that amount over to shoppers. With so many vehicles now ineligible, anyone who’s shopped around for EV leases in recent weeks or months will encounter some sticker shock that extends far and wide, to most EVs and plug-in hybrids. Late Tuesday, after the bill had been signed and the Internal Revenue Service and the Department of Energy provided some quick-turnaround guidance, we looked at the shortlist of American-built eligible vehicles.