Californians have enthusiastically embraced electric vehicles. In the 10 years from 2013 to 2023, our EV sales rocketed by 2,616%! It helped that both the federal and state governments offered some attractive tax incentives. However, the window for federal credits closes on September 30th, while state credits were eliminated some time ago.

Federal tax credit rules are complex, with limitations based on the origin of components, the assembly location of vehicles, vehicle costs, and even the buyer’s incomes. Unfortunately, no new BMW EV – and we have many great ones – qualifies for any federal tax credit.

But there’s still some good news.

Interest rates on new car loans generally run from a low of about 4.6% to as much as 16%, depending on an individual’s financial circumstances and credit score. However, BMW is offering interest rates of 2.99% to 3.99% for new 2025 and 2026 electric BMWs. These rates are currently in effect until July 31st, but we anticipate they’ll be extended until the same September 30th cut-off date for federal EV tax credits.

Even more compelling: BMW offers substantial lease credits and cash incentives through BMW Financial Services — often mirroring or exceeding the federal tax credit value:

Current Lease & Cash Incentives on New BMW EVs:

• BMW i4, i5, and iX: Up to $9,900 in lease credits or cash incentives
• BMW i7: Up to $12,000 in lease credits or cash incentives

These incentives can be applied directly to your lease or finance deal, providing immediate savings without waiting for tax season.

Why Lease?

Leasing is one of the easiest ways to take advantage of these incentives. While BMW’s electric vehicles may not qualify for a purchase-based federal tax credit, BMW Financial Services can pass along equivalent or greater savings through these lease credits — a clear benefit to those looking to drive electric now.

Twenty-three (23) used battery electric (BEV) and plug-in hybrid (PHEV) BMW models may qualify for up to $4,000 (30% of the sale price, up to a maximum of $4,000) in federal tax credits.

There are specific eligibility guidelines:

1. The vehicle must have been purchased on or after January 1, 2023.
2. The purchase must be made through a licensed dealer.
3. The sale price must be $25,000 or less.
4. The model year must be at least two years prior to the current year.
5. Buyer income limits apply: $150k (married/joint), $112k (head of household), $75k (all others).

You can read the IRS explanation and FAQs here.

The List of Pre-Owned BMWs that May Qualify

Let’s preface this list by saying your BMW of Fairfield client advisor will be able to guide you to a great BEV or PHEV option for your needs and lifestyle.

• 330e – 2016-18 and 2021-23
• 330e xDrive – 2021-23
• 530e and 530e xDrive – 2018-23
• 740e – 2017
• 740e xDrive – 2018-19
• 745e xDrive – 2020-22
• i3 (60ah) Sedan – 2017
• i3 Sedan and Sedan with Range Extender – 2018-21
• i3s Sedan and Sedan with Range Extender – 2018-21
• i4 Gran Coupe – 2022-23
• i7 xDrive60 Sedan – 2023
• i8 – 2014-17
• i8 Coupe and Roadster – 2019-20
• iX M60 – 2023
• iX xDrive50 – 2022-23
• X3 xDrive30e – 2020-21
• X5 xDrive40e – 2016-18
• X5 xDrive45e – 2021-23
• XM – 2023

BMW is a big believer in the future of electric mobility and has steadily moved toward electrifying its fleet of Ultimate Driving Machines. EVs offer lower maintenance costs, ranges comparable to gas-powered vehicles, and thrilling acceleration. Add BMW’s hallmark technology and luxury, and it’s clear why more drivers are making the switch.

Your BMW of Fairfield Client Advisor can help you explore your options and find the perfect electric BMW for your lifestyle.