Although qualifying Toyota vehicles are once again subject to the full federal EV tax credit, the 2023 Toyota Camry Hybrid does not meet the new criteria for eligibility.
Since 2010, the government has offered incentives in the form of tax credits to those who
purchase a new electric car. While past legislation capped the number of eligible vehicles from one maker at 200,000—which prohibited Toyota vehicles from qualifying if they were sold after October 1, 2022, when Toyota sold their 200,000th vehicle—the recent “Clean Vehicle Credit” under the Inflation Reduction Act once again changed the rules on American buyers.
The 200,000 cap has been removed, but under this new legislation, hybrids that are not plug-ins do not qualify. That means the 2023 Toyota Camry isn’t eligible for the latest tax credit—in fact, it never has been. But does that mean you shouldn’t consider it at all?
Let’s take a look at the pros and cons of purchasing a new Toyota Camry Hybrid, even without the promise of a tax break.
Is the Toyota Camry Hybrid still eligible for the federal tax credit?
No, the Toyota Camry Hybrid is not eligible for a federal tax credit, even with new legislation bringing changes to the tax incentives in the electric vehicle market.
Let’s take a closer look at what these incentives and their legislation have looked like over the past decade or so. The first EV tax credit was introduced in 2010 when the federal government began offering a credit of up to $7,500 for the purchase of new electric vehicles. This legislation also set a cap on the number of vehicles a maker could sell that would be eligible: 200,000.
Toyotareached this number around the middle of 2022, none of the Toyotas sold would have technically been eligible for the full credit starting on October 1, 2022, eventually not being eligible for any tax credit at all.
However, the Inflation Reduction Act of 2022 included a new policy known as the “Clean Vehicle Credit”, which removed the 200,000 vehicle cap and made some Toyotas eligible for the full tax credit once again.
The catch for Camry hybrid buyers? This particular model does not meet the eligibility requirements for this Clean Vehicle Credit. This is because standard hybrids of any kind do not meet the requirements. If you are looking for a model like this that will, you’ll need to start looking at sedans that offer plug-in hybrid versions.
What you should know about the new federal EV tax credit requirements
So what are the requirements for the new federal EV tax credit? Here’s an overview of what the 2023 criteria are, though these will change in the coming years:
- The EV must have been assembled in North America
- For $3,750 of the new credit, the vehicle battery must have at least 40% of its critical minerals from the United States or countries with a free trade agreement with the US
- To qualify for the other $3,750, 50% of the battery components must come from the United States or countries with a free trade agreement with the US
- The EV must have a battery size of at least 7 kWh
- The vehicle must have a gross vehicle weight rating of less than 14,000 pounds
- Income requirements dictate that in order to qualify, individuals must report an adjusted gross income of $150,000 or less; heads of household must report $225,000 or less; and joint filers must report $300,000 or less.
There are also some rules regarding the price of the vehicle. EVs under $25,000 will only be able to qualify for a tax credit of up to $4,000. The $7,500 maximum credit can be applied to battery electric vehicles with an MSRP below $55,000, and zero-emission vans, SUVs, and trucks with MSRPs below or equaling $80,000.
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Other electric vehicle incentives
The federal tax credit is the most talked about perk of purchasing a new electric vehicle, but it certainly isn’t the only one. There are many other incentives offered in most states. One thing to keep in mind when you check these, though: these are often offered only for all-electric or plug-in hybrid vehicles, so a Toyota Camry hybrid may not qualify for them.
Still, you may be curious about just what kind of credits may be offered in your state. To check your area, you can use online resources like the
Alternative Fuels Data Centerwebsite.
Is the Toyota Camry Hybrid still worth buying?
You may be wondering: if the Toyota Camry Hybrid isn’t eligible for any tax credit, is it still worth buying? Well, that all depends on what your priorities are.
The Toyota Camry has been one of the most popular picks in the mid-size sedan market for years, and the latest model earns a 7.7 out of 10 rating from Edmunds. Car and Driver gives it a comparable 8.5 out of 10 rating and ranks it fourth in its class overall.
Reviews cite the Camry’s comfortable interior, extensive list of standard safety features, and still-impressive mileage of around 50 mpg combined as reasons for its high standing. Plus, an MSRP of $29,450 for the base Hybrid LE model is a reasonable starting price point for such a well-established and well-equipped family car.
That lower MSRP might be enough to convince you to take the plunge even without the promise of the $7,500 tax credit. Plus, you’ll still
save on fuel costs, as it is one of the most fuel-efficient hybrids on the market.
What to buy instead of a Toyota Camry Hybrid
If knowing that you won’t qualify for that tax credit is enough to sway you away from the Toyota Camry, you’ll find that there are plenty of other options available to explore.
While it may be harder to qualify for the incentives under the Inflation Reduction Act, there are still a few sedans from other manufacturers that do meet the criteria. If you’re looking for a car as reliable as the Camry Hybrid but that also comes with some sought-after perks around tax time, here are some other options.
If you’re looking for a sedan: 2023 BMW 330e
Starting price: $44,900
Possible tax credit: $7,500
When you’re looking for a 2023 model that does qualify for a tax credit, you’ll likely notice that most of them are SUVs. If you’re set on a sedan, your options are a bit more limited, but the
BMW 330emight just be the perfect fit.
Rated number one in its class by Car and Driver, the BMW 3-Series boasts a powerful engine across all trims, and the 2.0-liter offering on the 330e is no exception with its 288 horsepower. The Xtraboost function on the engine even provides an additional thrust. You’ll also find a sleek modern design finished with high-end materials and an infotainment system that’s fun and easy to navigate.
The one weak spot of the 330e, especially when compared to the Camry, is its mileage: the plug-in hybrid 330e only gets around 28 mpg combined.
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If you want to stick to the Camry’s price point: 2023 Chevrolet Bolt EUV
Starting price: $28,195
Possible tax credit: $7,500
While it's not a sedan, the 2023
Chevrolet Bolt EUVis a budget-friendly option that can also qualify for the new EV tax credit, making it all the more affordable. Plus, the 65.0-kWh battery delivers 247 miles of driving range, which may not be the most impressive on the market, but will get you pretty far.
The starting price is one of the lowest in the segment at $28,195. For that price, you’ll get the base model, equipped with a solid amount of cargo space and passenger room, stylish upholstery, and a flat-bottomed steering wheel for an up-to-date appearance.
If mileage matters the most: 2023 Tesla Model 3
Starting price: $46,990
Maximum range: 272 to 315 miles
A best-seller in the electric vehicle market, the
Tesla Model 3is the way to go if you’re looking to maximize your mileage and qualify for the latest tax credit.
While the price is a bit higher than that of the other options listed here, the consensus from most experts and drivers is that the extra cost is absolutely worth it. The base model offers 272 miles of driving range, while the Long Range model extends that even further to an impressive 358 miles.
Plus, all Model 3s, regardless of trim level, also come standard with some pretty sweet luxury touches like heated front seats, navigation, and the maker’s Autopilot semi-autonomous driving system.
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