State incentives come in two forms: indirect, such as HOV lane access and toll reductions and income-tax credits, or sales- and excise-tax exemptions and cash rebates. In all, 19 states offer some form of incentive.
The indirect incentives such as HOV lane access and reduced tolls are offered across many states, including Arizona, California, Florida, Georgia, Hawaii, Maryland, New Jersey, Utah and Washington, D.C. Cash rebates have been offered in six states — California, Connecticut, Texas, Delaware, Massachusetts and Tennessee — and range from $2,000 to $2,500. They are often offered on a first-come-first-serve basis, and funding levels that remain for purchases today can vary.
For example, in Delaware 69 percent (or $151,800) of the rebate funds remain for disbursement. They are also subject to expiration of legislation — the Texas program ended this past summer — as well as politics. Tight budgets at the state level and a more contentious atmosphere in state budget houses has led some EV incentives enacted in recent years to be suspended or scaled back.
Tax credits can be larger than rebates — Colorado offers a $6,000 credit.
It's essential to figure out if you will be able to use the full amount of federal and state income-tax credits at year-end. If your tax situation will not allow you to use these credits, it's a major blow to the argument for buying an EV, because it doesn't bring down the price of the car by enough, said Edmunds.com senior consumer advice editor Philip Reed.
But the incentives can also get pretty tricky — especially the bigger ones. Louisiana, for example, offers a tax credit of up to 36 percent (it used to be 50 percent) for the incremental cost associated with buying an alternative fuel vehicle, but it's specifically for the "alternative fuel property" in the car, not the price of the car itself. For EV buyers, that means Louisiana's big tax credit is based on the EV battery system cost, and that is typically the most expensive part of the car.
But it's important to remember that there is no 36 percent tax credit on the $75,000 Tesla price tag. Tesla still estimates that a Louisiana buyer will save up to $8,000 from the incentive. Louisiana offers a more standard 7.2 percent credit for an alternative vehicle purchase, up to $1,500 (that used to be $3,000).