Toyota bZ4X May Miss Out On $7,500 Tax Credit

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Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

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, Automotive Editor - April 14, 2022

Toyota doesn’t have any all-electric cars on sale, but the automaker will reportedly hit the 200,000-cap for electrified vehicle sales before the end of June. This, for Toyota and consumers, is coming at a horrible time, as the Japanese automaker is set to release the 2023 bZ4X electric crossover shortly. For shoppers, this means they’ll have to scrounge to find a bZ4X to purchase before the phase-out of the federal tax credit begins to get a good deal on the electric SUV.

Speaking with ABC News, Bob Carter, Toyota’s head of sales in North America, confirmed that Toyota expects to hit the 200,000 mark when the federal tax credit begins to phase out for electrified vehicles before the end of June. Once Toyota passes the mark, the federal tax credit for its electrified vehicles, which includes the all-new bZ4X will begin to be phased out.

Unlike Tesla and General Motors, Toyota is getting close to reaching the cap because of its plug-in hybrid vehicles, like the RAV4 Prime and Prius Prime. Because of its battery size, the RAV4 Prime is currently eligible for the full $7,500 federal tax credit, while the Prius Prime is eligible for up to $4,500. The upcoming bZ4X will also be eligible for the full $7,500 federal tax credit when it goes on sale this summer, but only for a short period of time.

Once Toyota hits the 200,000 figure, the amount of the federal tax credit that its vehicles will be eligible for will start to decrease. Consumers will have until the end of the quarter and for two following quarters when Toyota surpasses the 200,000 mark to receive the full $7,500 federal tax credit. For the next two quarters, the federal credit is cut in half to $3,750 and then cut in half again to $1,875 for another two quarters. Once those two quarters are up, none of Toyota’s vehicles will be eligible for any amount of the federal tax credit.

Toyota couldn’t have hit the cap at a worse time. The 2023 Toyota bZ4X will go on sale shortly with a starting price tag of $43,215 (with destination). Getting into a range-topping Limited trim with the dual-motor configuration costs $49,995. Without the federal tax credit, consumers could choose to purchase the Subaru Solterra, which is a near-identical twin to the bZ4X, over Toyota’s EV. Subaru hasn’t announced pricing for the Solterra, but with similar specs as the bZ4X, we can’t see it being that far off in pricing. This makes the Subaru a much better deal for consumers that can take advantage of the federal tax credit.

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Pictured: 2023 Toyota bZ4X

, Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

Follow On: Twitter

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