BALTIMORE — The state of Maryland is reintroducing a program that could help drivers offset the cost of purchasing an electric vehicle (EV), while the federal government is limiting which cars qualify for tax breaks.
The state's excise tax credit program offers up to $3,000 in tax credits for newly purchased or leased EVs. The Maryland Energy Administration's director of energy programs, Eric Coffman, explained that the program would only apply to new applications, and while funding lasts. Coffman said the state aims to have 300,000 EVs on its roads by 2025, up from around 60,000 today.
Felix Cruz bought an electric vehicle to benefit the environment and his bottom line. “I commute roughly about 70-75 miles roundtrip per day and I just really wanted to get the Tesla,” said Cruz.
He received a $2,500 tax credit through the federal government then applied for the state excise tax credit of up to $3,000.
“I bought the vehicle June 19 of 2020 and I applied the very next month of July,” said Cruz.
Nearly 3 years later, he hasn't received the state credit. Cruz and roughly 800 other drivers fall within a funding lapse in the program.
The Clean Cars Act of 2017 offered excise tax credits of up to $3,000 for newly titled EVs purchased and titled for the first time on or after July 1, 2017, but before July 1, 2020. Applications needed to be submitted by July 1, 2020.
Following that date, the Motor Vehicle Administration continued to accept applications, but without additional funding, they haven’t been processed.
Last year, the Maryland General Assembly renewed funding for the program, but it only applies to newly purchased or leased cars from July 1, 2023, through July 1, 2027.
“We've made proposals in the past to have some retroactive options but ultimately, it is challenging,” said Coffman.
In the past, when funding ran out, there'd be a waitlist for when funding is renewed but the backlog became so great, very few new applicants would receive the benefit.
Coffman emphasized that while incentives are a bonus, they should not be relied on. The Clean Cars Act of 2022 lowers the value of eligible EVs, with the base MSRP not exceeding $50,000, down from $63,000. On the federal level, guidance issued last week limits EVs eligible for a $7,500 tax credit. Final assembly must be in North America, and their batteries must meet new restrictions.
"We want to help incentivize, we also want to help educate people on the real benefits of making that purchasing decision," said Coffman. "We want to emphasize access to these incentives for a lot of folks who are not going to be able to purchase vehicles at that price point."
Aside from tax credits, there are also rebates for charging stations and a utility rate reduction. The updated list of incentives and tax credits for EVs can be found here.
For information on federal tax credits, and which EVs qualify, click here. The federal government also offers tax credits for eligible used EVs, click here for more information.
WMAR-2 News Mallory Sofastaii reached out to Governor Wes Moore’s office about the EV drivers still on the waitlist for the state excise tax credit.
Governor Moore’s press secretary, Carter Elliott, responded: “Governor Moore would consider legislation from the state legislature that would further protect our environment and help us achieve our goal of reaching net-zero emissions by 2045.”
