Considering Toyota’s new electric vehicle (EV) or a fuel-efficient Toyota plug-in hybrid vehicle (PHEV)? Act fast. Their effective price is likely to jump later this year.
Incentives Sunset After 200,000 Sales
The federal government provides a tax incentive of up to $7,500 to help Americans purchase electric cars or PHEVs. But the full offer is only available on the first 200,000 such vehicles a company sells.
After that, the credit sunsets gradually. For six months after that 200,000th sale, buyers can apply for half the credit. For six months after that, a quarter of it still applies. Then it’s gone.
Toyota’s EV is New
Toyota recently introduced its first fully-electric vehicle to reach a widespread market, the 2023 bZ4X.
It’s a compact SUV similar in size to the RAV4, with a range of up to 252 miles and a starting price of around $42,000 before the tax incentive.
It hasn’t been around long enough to make a big sales impact, but it’s not the first Toyota vehicle to qualify for the credit.
Its Plug-in Hybrids Are Not
Both the Prius Prime and RAV4 Prime are PHEVs. PHEVs use both an electric motor and a gasoline engine like normal hybrids. But they are capable of diving some distance on electric power alone – 25 miles for the Prius Prime and 42 miles for the RAV4 prime.
That qualifies them for the credit. Toyota has sold more than 190,000 of those two combined.
Incentives Might be Gone This Summer
Automotive News reports, “Toyota executives have said they are planning for their share of credits to run out as soon as this summer.”
That would make Toyota the third automaker to hit the milestone. Both Tesla and General Motors have already surpassed it.
Competition Still Qualifies
Those looking for a bZ4X have an obvious solution if they still want to save $7,500. The vehicle is a joint project between Toyota and Subaru. Subaru sells its own, almost-identical version under the name Solterra.
The 2023 Solterra comes with all-wheel-drive and slightly higher ground clearance. But the two vehicles share almost all of their parts. It starts at $44,995. That’s a slightly higher sticker price than the bZ4X. But once the Solterra qualifies for a big federal rebate and the bZ4X doesn’t, it will become the cheaper option.
Those considering one of Toyota’s PHEVs will have even more options. The closest thing to the Prius Prime on the road today is probably the Hyundai Ioniq PHEV. The RAV4 Prime, meanwhile, has to do battle with other compact SUV PHEVs like the Ford Escape PHEV, Mitsubishi Outlander PHEV, and the upcoming Kia Sportage PHEV.