Due to recent legislation, tax credits for the purchase of new and used EVs are due to expire on September 30, 2025.
The tax credit for residential EV chargers is set to expire on June 30, 2026.
ELECTRIC VEHICLES
Electric vehicles (EVs) use electric batteries to power their wheels, rather than an internal combustion engine. There are many existing financial incentives for purchasing an EV. The video below explains EVs in more detail.
Electric vehicles can help reduce one's dependence on fossil fuels, which also helps to protect against fluctuations in the cost of oil.
Since EVs do not have the components of a traditional combustion engine, less maintenance is required to keep them running.
Using electricity for power is more cost-effective than burning fossil fuels.
TYPES OF ELECTRIC VEHICLES
Plug-In Hybrid (PHEV)
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PHEVs have an electric motor and an internal combustion engine, allowing the driver to switch between the two sources.
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PHEVs have an overall longer total driving range because they can be powered by gasoline energy.
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However, this also means they have a shorter electric range than BEVs.​​
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Battery Electric Vehicle (BEV)
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BEVs run solely on battery packs that provide energy to electric motors.
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They do not have a backup gas engine like PHEVs, so when the battery is exhausted, the only way to continue driving is to recharge it.
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However, they have a much higher electric range than PHEVs. ​
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POTENTIAL SAVINGS
Mainers can save up to $1,000 a year by transitioning to an electric vehicle. According to a study by Argonne National Laboratory, people who drive long distances and live in areas with expensive fuel and relatively inexpensive electricity can expect the most savings from switching to an EV.
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Based on an analysis conducted by Efficiency Maine, the fuel cost of a BEV is about $1200 less per year than that of an all gas vehicle in Maine. A plug-in hybrid is about $1000 less annually.
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To get a better idea of your potential savings, check out this fuel savings calculator!
FINANCIAL INCENTIVES
State Rebates
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Efficiency Maine has rebates for low- and moderate-income homeowners looking to purchase new or used electric vehicles. This means that plug-in hybrids do not qualify for this rebate. To be eligible for the rebate, one must verify their income with Efficiency Maine and purchase an off-peak charger. There is an additional rebate available for the purchase of the off-peak charger, reducing the price from $429 to $129. Learn more about the charger rebate here. Below is a breakdown of the rebates by income and type of car being purchased:
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For new vehicles, they must be on this list of eligible vehicles, and their MSRP must be $80,000 for pickup trucks and commercial vans and $55,000 for all other vehicles.
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For used vehicles, they must be on the US DOE List of BEVs and have a final purchase price of $40,000 or less. The vehicle also cannot be older than 6 years; therefore, it must be from 2019 or later. The mileage on the car must also be below 72,000 miles.
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Federal Tax Credit
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New Purchase
New EVs purchased in 2023 or later may be eligible for a clean vehicle tax credit of up to $7,500. Several factors determine eligibility for the credit, including the vehicle's MSRP, final assembly location, battery component and/or critical minerals sourcing, and adjusted gross income (AGI).
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There are two ways in which to claim the credit:
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On your tax return for the year in which it was placed in service using Form 8936.
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You can transfer the credit to the dealer so that they can apply the credit amount to your final purchase cost. This essentially allows you to receive the benefit of the credit at the time of sale.
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Used Purchase
Pre-owned EVs purchased on or after January 1, 2023, are also eligible for a clean vehicle tax credit. The credit is 30% of the sale price, up to a maximum of $4,000. The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. Also, you can't apply any excess credit to future tax years.
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It must have a sale price of $25,000 or less.
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It must have a model year at least two years earlier than the calendar year when you buy it. For example, a vehicle purchased in 2025 must be a model year of 2023 or older.​
Income
New Electric Vehicle
Used Electric Vehicle
Low
Moderate
$2,000
$1,500
$7,500
$3,500