Rhode Island’s new DRIVE EV incentive: what you need to know

Updated

Digital representation of an EV and the state of Rhode Island
Rhode Island is making it easier for homeowners to afford an EV with the new DRIVE EV program.

As electric vehicles become more popular, some states are either adding to or introducing new incentives for electric vehicle owners in the state. Rhode Island is introducing a newly expanded EV incentive - with a potential total rebate of $4,500 if you meet all of the requirements.

These incentives were created with the goal to help make electric vehicles more affordable for consumers across the state. Coupled with federal incentives, this can make the price tag of an EV more manageable for a larger subset of consumers.

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Key takeaways

  • Rhode Island introduced a rebate incentive for EVs purchased or leased after July 7, 2022.
  • Purchasing or leasing a new EV earns you $2,500, while a hybrid gets $1,500.
  • Low-income residents can receive an additional $2,000 when purchasing an EV.
  • Register the car at least 120 days after the purchase or lease date, and act fast because there is only enough money for an estimated 500 EVs.

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    What is the new Rhode Island DRIVE EV program?

    Rhode Island's DRIVE EV program was first announced by Governor McKee in March 2022. The goal of the program is to make electric vehicles more affordable for Rhode Islanders and to double down on the state's commitment to a clean energy future.

    Along with the $575,000 allocated to the DRIVE EV program, McKee also announced a 3.38 million investment to build out the state's EV charging stations.

    The DRIVE EV incentive can be worth anywhere between $750 to $2,500, depending on if you are purchasing or leasing the vehicle, if it's new or used, or if it's an electric vehicle or plug-in hybrid. Let's take a closer look at some of the requirements.

    New vehicles

    New electric vehicle purchases or leases are eligible for a rebate of $2,500. New plug-in hybrids, on the other hand, only receive $1,500.

    To qualify for the incentive, the car must be purchased or leased by a Rhode Island resident from a Rhode Island licensed car dealership. The car must also be registered in Rhode Island. The purchase or lease must have been completed on or after July 7, 2022, and all DRIVE EV applications must be received within 120 days of the purchase or lease date. If you’re opting for a lease, the lease term must be at least 24 months.

    Another really important thing to note is that not all EVs qualify for the incentive - the final sale and purchase agreement price must be $60,000 or lower. That means luxury EVs like the Porsche Taycan or the Tesla Model S can’t get the incentive. But, more reasonably priced EVs like the Kia EV6, which starts at $40,900, or the Hyundai Ioniq 5 with its $39,950 price tag, can take advantage of the DRIVE EV program.

    Used vehicles

    A used EV can get a $1,500 rebate through DRIVE EV, while a used plug-in hybrid qualifies for $750.

    Just like for the new vehicles, used EVs and plug-in hybrids have to be purchased at a licensed car dealership by a Rhode Island resident, leases must have a minimum term of 24 months, and applications for the incentive must be received within 120 days of the purchase or lease date.

    The used vehicle incentive has a purchase price limit of $40,000. So again, no luxury EVs are going to qualify for this one either.

    Drive+

    For low-income residents, an additional rebate of up to $2,000 is available for those who qualify. To be eligible, residents must show valid proof of participation in a qualifying state or federal program or sign a Self-Attestation form detailing income. If you qualify, you can receive the following rebates:

    Vehicle type

    Total Drive+ incentive amount

    New EV (fuel cell or battery)

    $4,500

    New plug-in hybrid

    $2,500

    Used EV (fuel cell or battery)

    $3,000

    Used plug-in hybrid

    $1,500

    The vehicle qualifications are the same for new and used vehicles in the general DRIVE EV program. In addition to those criteria, you must also either participate in a low-income program, such as the Weatherization Assistance Program (WAP) or the Low Income Home Energy Assistance Program or you must meet the state’s low-income guidelines.

    Residents can follow the application here for the potential to get a rebate of up to $4,500 on a newly purchased electric vehicle.

    Act fast! The program's budget allocates enough money for roughly 500 new EVs. Rhode Island has $575,000 on hand for the rebates, and to support all of these new EVs, the state is investing $3.38 million to build out available EV charging stations. Buy your car now before the EV budget dries up!

    Do Rhode Island drivers qualify for federal EV incentives?

    The good news for Rhode Island drivers is that they can take advantage of the DRIVE EV incentive and the federal EV tax credit, worth up to $7,500, so long as the car qualifies for both.

    The federal incentive has a limit on what EVs qualify - they must meet strict mineral and manufacturing requirements. The DRIVE EV incentive, however, can still be applied to any electric vehicle.

    The Federal Tax Credit can be applied as a down payment at the time of purchase, but if you do not use that option, it can only be applied as a tax credit. An inherent issue with the federal tax credit is that you need to owe a large amount of taxes to even get the savings. Additionally, if you only owe $1,000 in taxes and qualify for the full $7,500, you cannot carry over the $6,500 to the next year.

    So it is possible to qualify for the DRIVE EV incentive and the Federal Tax Credit but there are less hoops to jump through for the DRIVE EV incentive.

    The future is green in Rhode Island

    Governor McKee is implementing new initiatives to create a state that will be run on clean electricity and with roads full of zero-emissions EVs. By 2033, Rhode Island plans to offset 100% of its electricity with power from wind and solar. This is exciting news for the state and a model that others can look to as we transition from fossil fuels.

    If you currently have an EV in Rhode Island and want to charge it with clean energy, adding solar panels now can get you to this goal faster. Having solar panels on your roof gives you energy independence while reducing your bill. Charging an EV with solar can save you thousands on gas.

    There is really no bad time to get an EV. But, now is better than ever for people in Rhode Island to reserve one for themselves and save a little extra money.

    Find out how much solar panels will cost for your specific roof
     - Author of Solar Reviews

    Ana Almerini

    Web Content Specialist

    Ana is a content specialist at SolarReviews. She uses her experience in marketing and knowledge from her master's in climate communications to research and review the solar industry.

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