Colorado EV Tax Credit Increase

Buying or leasing a new EV in Colorado could become more affordable thanks to the state’s new EV tax credit. The credit, which ranges from $1,500 to $5,000 depending on the vehicle type and price, can be combined with the federal EV incentive of up to $7,500 from the Inflation Reduction Act.  This means Coloradans could save up to $12,500 on their new EV purchase or lease. 

The state’s EV tax credit is currently $2,000 for new battery-electric or plug-in hybrid cars with an MSRP of less than $80,000. For leases, the credit is $1,500. However, starting from July 1, 2023, the credit will increase to $5,000 for purchases and $2,500 for leases of EVs priced under $35,000. The credit will gradually decrease until 2029. The state’s EV incentive is only available to Colorado taxpayers.