Toyota has run through its available U.S. tax credits for electrified vehicles, prompting the automaker to voice concerns over higher vehicle prices and a possible roadblock to widespread EV adoption.
Per a recent report from Automotive News, Toyota announced last week that it sold a total of 3,876 plug-in hybrid and electric vehicles in June, bringing the Japanese automaker over the available tax credit cap.
The U.S. EV tax credit applies to both electric hybrid vehicles and fully electric vehicles, with upwards of $7,500 available to buyers. Toyota previously only offered hybrid models, such as the Toyota Prius, although the automaker is now launching the bZ4X, its first fully electric vehicle set for launch across the U.S.
That said, the U.S. EV tax credit is limited to 200,000 units per automaker. Toyota has since surpassed the cap, making it the third automaker to do so alongside GM and Tesla.
In its approach to the cap, Toyota has called for Congress to extend the available EV tax credits, joining GM, Ford, and Stallantis in asking that the cap be removed entirely to help combat climate change. However, the automakers vary in the way in which the new credits should be applied. For example, although GM, Ford, and Stellantis back a proposal from the Biden administration calling for an additional $4,500 tax credit for unionized automakers, Toyota and Tesla oppose the plan. The proposed incentive plan was since scrapped after pushback from Democratic senators and a lobby of foreign automakers.
Without additional tax credits from Congress, Toyota’s remaining EV tax credits are set to be reduced over a one-year period, a phase triggered once the IRS determines that the automaker has indeed hit the cap. Unfortunately for Toyota, the current high fuel prices and renewed interest in electrified vehicles across the U.S. make for poor timing with regard to a drawdown in available EV tax credits.