The recent overhaul of the federal electric vehicle tax credit, which aims to make EVs more affordable, significantly reduced the number of eligible models. To take advantage of the savings, shoppers must choose from a relatively short list of vehicles that are made in North America and meet the new battery production and materials sourcing requirements. Following changes to the guidelines, a dozen electric cars qualify for the full $7,500 credit and even fewer are eligible for the partial $3,500. One alternative to buying an EV is to lease one, and some automakers are offering special deals on EV leases that mirror the credit.
Related: Leased and Used Electric Vehicles Now Qualify for Federal Tax Credits
One benefit of leasing an all-electric is that it typically comes with a lower monthly payment compared to purchasing the same model, but shoppers should consider the trade-off: They’ll have to return the vehicle at the end of the lease without the equity and trade-in value that comes with buying a car. For some consumers, this may not be a concern since they choose to lease in order to get the latest tech and features every few years — and this is especially applicable to EVs as their technology, charging and range capability quickly evolves. When it comes to the potential for savings, leasing an EV can offer the benefit of extending the federal tax credit to a wider range of models in addition to other incentives, depending on the brand and vehicle.
$7,500 EV Lease Bonus
An EV lease can provide a loophole to the $7,500 eligibility requirements for purchased vehicles. Some automakers get a commercial credit for their leased vehicles, and these cars aren’t subject to the same restrictions as those purchased by consumers. As a result, some brands are passing along these credits to lessees.
These savings usually come in the form of a $7,500 EV lease bonus, credit or reward applied as a capitalized cost reduction for select brands and models. The credit lowers the total manufacturer’s suggested retail price of the vehicle (similar to a down payment or trade-in), reducing the total lease cost and the monthly payment.
Automakers like Kia and Hyundai don’t make any EVs that qualify for the $7,500 consumer tax credit; however, both are promoting a $7,500 lease bonus on specific EV models. Kia offers the deal on the base Wind trims of the 2023 EV6 and Niro EVs, while Hyundai lists the incentive for 2023 Ioniq 5 and Kona EV leases.
All of the lease deal examples listed below apply to qualified consumers only, and brands specify that actual payments may vary.
2023 Kia EV6
- Eligible trim: Wind (RWD)
- Monthly payment: $499 for 36 months
- Cash due at signing: $4,999
- Offer ends: July 5
2023 Kia Niro EV
- Eligible trim: Wind
- Monthly payment: $329 for 36 months
- Cash due at signing: $3,999
- Offer ends: July 5
2023 Hyundai Ioniq 5
- Eligible trims: SE Standard Range, SE, SEL, Limited
- Monthly payment: $426-$657 for 36 months
- Cash due at signing: $3,999-$4,008
- Offer ends: May 31
2023 Hyundai Kona Electric
- Eligible trims: SE Standard Range, SE, SEL, Limited
- Monthly payment: $269-$468 for 36 months
- Cash due at signing: $3,999-$4,009
- Offer ends: May 31
EV Leasing Credit Applies to Luxury Brands
In an effort to make the federal tax credit apply to the most affordable models, the guidelines for consumer-purchased EVs set price caps for eligible vehicles at $55,000 for cars and $80,000 for SUVs, vans and light trucks; this disqualifies many luxury models and higher-end trims. Shoppers looking for a deal on such an EV will find marques like BMW, Mercedes-Benz and Polestar are offering a $7,500 lease bonus on vehicles like the i4, EQS SUV and Polestar 2.
2023 BMW i4
- Eligible trims: eDrive35, eDrive40, M50
- Monthly payment: $499-$979 for 36 months
- Cash due at signing: $4,399-$6,859
- Offer ends: May 31
2023 Mercedes-EQ EQS SUV
- Eligible trims: 450, 580
- Monthly payment: $1,049-$1,459 for 24 months
- Cash due at signing: $9,283-$11,743
- Offer ends: May 31
2023 Polestar 2
- Eligible trims: Long Range Single Motor, Long Range Dual Motor
- Monthly payment: $469-$485 for 36 months
- Cash due at signing: $5,469-$5,489
- Offer ends: May 31
Lease Deals for Bestsellers
Popular battery-powered vehicles like the Chevrolet Bolt EV and Bolt EUV and the Ford Mustang Mach-E qualify for a partial or full EV tax credit for consumer purchases, but the automakers are offering separate leasing deals for these models. A low-mileage lease deal is available for the Bolts’ base LT trim, while Ford is offering lease deals with no security deposit on most variants of the Mach-E.
2023 Chevrolet Bolt EV
- Eligible trim: LT
- Monthly payment: $299-$349
- Cash due at signing: $5,259-$6,759
- Offer ends: May 31
2023 Chevrolet Bolt EUV
- Eligible trim: LT (with Preferred Equipment Group)
- Monthly payment: $319-$369 for 36 months
- Cash due at signing: $3,734-$6,769
- Offer ends: May 31
2023 Ford Mustang Mach-E
- Eligible trims: Select, Premium, California Route 1, GT
- Monthly payment: $564-$755 for 39 months
- Cash due at signing: $5,109-$6,935
- Offer ends: Not specified
The Fine Print of EV Lease Deals
When considering an EV lease, it’s important to carefully read the disclaimers of the advertised deal. Just like low financing deals for a vehicle purchase, most lease offers are only available to shoppers with good credit and can vary widely by region. Additionally, some deals offer special rates on low-mileage leases only, such as the ones advertised for the Chevy Bolt EV and Bolt EUV (30,000 miles for a 36-month lease with an overage charge of 25 cents per mile).
It’s also worth considering whether or not you’ll want to purchase the vehicle at the end of your lease. While most automakers offer this option, brands like Ford and Tesla have ended their lease buyout option for EVs.
Getting the $7,500 EV tax credit on a vehicle that otherwise wouldn’t qualify, coupled with a lower monthly payment on a brand-new EV, can be a tempting proposition, but leasing isn’t right for everyone. The short-term benefit of lower monthly payments comes with some potential downsides in the long run: In addition to not having equity in the car, getting out of the lease may be difficult or costly should you find an EV doesn’t work for you, and you may be on the hook for overage miles or damage at the end of the lease.
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