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Toyota EV Rental Prices Soar After Passage of U.S. EV Subsidy Bill

published: 2022-09-07 9:30

After the passage of the anti-inflation bill in the United States, subsidies for electric vehicles have been expanded but many restrictions have been added, causing a strange phenomenon. Many plug-in hybrid vehicles and pure electric vehicles are now starting to increase in price.

U.S. President Joe Biden signed the "Anti-Inflation Act" last month, which has a number of provisions for renewable energy and electric vehicle subsidies, also known as the "Clean Vehicle Credit," with up to US$7,500 in subsidies.

Ironically, just after this bill was passed, many automakers began to raise prices, such as Toyota's pure electric SUV BZ4X, whose monthly rental price for long-term corporate rentals increased by US$100.

In addition, the monthly rental price of the Toyota RAV4 Prime plug-in hybrid SUV has also risen from the previous US$490 per month to $643, but they have also reduced the upfront signing fee by US$1,000. Overall, the cost that users need to pay during the rental period of the car has increased by about US$7,000. Isn’t this very close to the subsidy amount?

I believe Taiwanese readers are familiar with this game. Whenever the government introduces some subsidies, the car factory will always actively promote it and increase prices at the same time. With subsidies, it is the same as without subsidies.

From the perspective of electric SUVs, the monthly rental price of the BZ4X after the price increase has reached as high as US$745 (data in California), and the Tesla Model Y LR, which is priced a lot more expensive than the BZ4X, the monthly rental price has not changed, still It's $789, and you'd have to be a die-hard Toyota fan to be able to spend that amount.

According to CarsDirect, a car rental service provider, Toyota would have offered rental plans with reference to different regions, but the special discounts for plug-in cars and pure electric cars were almost all cancelled overnight after the new bill was passed and the company returned to their original pricing.

The confusion brought about by the new bill continues. Most consumers do not know which car models are eligible for tax reduction subsidies. Long-term rentals are even more tricky, because long-term rentals of electric vehicles can also get tax reduction subsidies, but the amount of subsidies is calculated by the car rental company. This explains why Toyota is raising prices so much. Since their cars could have received tax reduction subsidies and lost these subsidies after the new bill.

The new subsidy qualification requires that vehicles must be manufactured in North America, and in the next few years, a certain proportion of battery raw materials will also be required to come from North America. The BZ4X and RAV4 Prime are all made in Japan. Under the old regulations, you can get up to $2,500 in subsidies, but now they are all gone.

Also affected is Volkswagen. Currently, both Volkswagen plug-in cars and pure electric cars are still produced in Germany and do not meet the new subsidy qualifications. These two car leaders are currently making every effort to build electric vehicle production lines in North America to launch US-made versions. Before the launch, consumers will have a new wave of price increases to face.


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