EVs explained

EVs Explained Tax Credits feature photo
EVs explainedFeatures

How does the EV federal tax credit work and which cars still qualify in 2023?

Hello, and welcome back to your regular dose of EVs Explained! Many altruistic reasons exist to switch over from a gas guzzler to an electric vehicle, like keeping hush for the neighbors or allegedly doing your part to help God’s green earth and all. But today’s topic is a little more self-interested, and that’s okay. Here. Have some EV tax credits. On Uncle Sam. But what are they?

Well, hey. You know how Tesla has been raving on about how their Model 3s are now sub-30-grand cars? Well, technically, they are and they aren’t. They’re forty-grand cars that Tesla is advertising as less by factoring in potential gas savings plus a handy little pick-me-up from the feds just for opting for an electric vehicle over a baby seal-clubbing Sonata (to Tesla-stans and Hyundai fans, that’s a joke). That’s the oh-so-desirable tax credits, my friends.

That’s correct. Right now, you can get a cool chunk of cash when purchasing an EV. And in this explainer, we’ll be going over what an EV tax credit is, what you need to qualify, and how it will change looking forward. No tech lessons today. Right now, it’s all about the moolah!

Tesla Model 3 Highland Pair
Image: Tesla

Tax liability and the EV tax credit

Last summer, the Inflation Reduction Act of 2022 was passed into law by Congress. The bill includes revisions to the credit for qualified plug-in EVs and fuel cell electric vehicles purchased from 2023 to 2032. Purchasers of this type of vehicle may now be eligible for a tax credit of up to $7,500 for new EVs and up to $4,000 for used EVs (limited to 30% of the sale price). This would lower your tax liability for whatever you qualify for up to that amount. 

It is important to note this is a nonrefundable tax credit. You need to have enough tax liability if you want to capture the full amount that the vehicle you’re purchasing is qualifying for. In layman’s terms, what that means is that you have already exceeded your allowable. You will not see any overage as a refund during the approaching tax season and you cannot apply excess credit to the following tax year.

“Wait, stop. What exactly is tax liability?”

Simply put, it’s just the total amount of money owed at the end of the tax year. If you are a general W-2 employee, every paycheck you receive from your company already has taxes taken out automatically. That goes to your tax liability throughout the year. At the end of the year, when filing your tax return, this is the time when you add in any credits and deductions that you qualify for. Once applied, that number you’ve arrived at is now your adjusted tax liability. If you paid more if you’re W-2, you get a refund. If you didn’t pay enough to cover, well, you owe the IRS money. Tax liability is the total, not the difference between what was owed and what was paid.


Image credit: Joe Tilleli

“Mr. Tilleli, can you use ‘tax credits’ in a sentence?”

So a qualifying vehicle such as a Chevy Bolt purchased today (assuming you qualify for the full amount) will let you realize $7,500 toward your tax liability come April of 2024 when you file your taxes. You will use Form 8936 when filing your federal income taxes. Conversely, if you started with a daily low tax liability and have already lowered it through other credits, such as claiming dependents, it’s possible that there isn’t enough liability left to receive the full $7,500. You only realize what you have remaining in your tax liability.

The bill allows for one credit per vehicle. You can claim a tax credit for every qualified vehicle you purchase. However, there are still income limits to be mindful of, and since your tax liability can only be so much, the tax credits you’d be eligible for will also only be so much.

Sorry. No infinite money glitch for flipping a bunch of EVs. You can’t Forza Auction House hack your way out of this one.

Chevrolet Bolt on the beach
Image: Chevrolet

What vehicles qualify?

Many new EVs are eligible for the full amount of  $7,500 though there are exceptions. It’s best to think of the tax credit in two different components — the battery requirement and the critical minerals requirement. Each is responsible for a partial credit of $3,750, each adding up to half of the new tax credit.

For the battery requirement, a certain percentage of the vehicle’s battery must be assembled or manufactured in North America. Over the next ten years when the Inflation Reduction Act of 2022 is in effect, the required percentage is going up for manufacturers. Those percentages are as follows:

  • 2023: 50%
  • 2024: 60%
  • 2025: 60%
  • 2026: 70%
  • 2027: 80%
  • 2028: 90%
  • 2029-2032: 100%
Lanzador at Pebble Beach
Image: Lamborghini

For the critical minerals requirement, we’re dealing with a similar story. A certain percentage (that will increase over the decade) of the minerals in the car’s battery must be extracted or processed within the United States or within a country that has a free-trade agreement with the U.S. Percentages are as follows:

  • 2023: 40%
  • 2024: 50%
  • 2025: 60%
  • 2026: 70%
  • 2027-2032: 80%

A couple more stipulations exist as well such as restricting the sourcing of battery components or critical minerals from foreign countries of concern such as China. Those go into effect in 2024 and 2025, respectively. However, if you seek the tax credit amount for a specific EV vehicle, the most up-to-date information exists at fueleconomy.gov where you can look up eligible models and filter based on purchase scenario, model year, and vehicle type, among other stats like MPGe and total range.

How do you qualify?

Beyond the vehicle qualifications, you must also consider the personal qualifications. In order to qualify for the credit, the vehicle you are purchasing must be for your own use (not resale) and primarily driven in the United States.

Your tax filing status and modified adjusted gross income are also part of the picture. The following are the upper-income limits for each status:

  • $300,000 for married couples filing jointly 
  • $225,000 for heads of households
  • $150,000 for all other filers

2024 and onward

As stated in the earlier explanation, the tax credit is currently set up in which you claim the tax credit when filing your taxes. However, in 2024, a new option will allow a purchaser of a clean vehicle to transfer that credit to an eligible entity. What is an eligible entity? Well, the dealer that sold it to you.

Psst. It’s the car.

2024 Ford Lightning Platinum Black from rear angle view
Image source: Gabe Carey (Acceleramota)

This means you can fully realize the tax credit at the time of sale, turning it into an upfront discount applied toward your purchase. So if you were to purchase that Chevy Bolt in 2024, instead of paying the list price of $26,500, you could transfer that credit, getting the EV for $19,500 – provided you qualify.

However, we still have some unanswered questions. If you apply the $7,500 at the time of purchase and do not have $7,500 in tax liability, you will owe the IRS back that money. The process for this is still yet to be defined in terms of how you will determine at the time of purchase. It is unclear if there will be interest or fees or something along those lines, but the IRS will be entitled to recapture. 

Last thoughts

With this tax credit in place, we expect to see a lot more EVs coming onto the road over the next decade. Sometimes, a little bonus is needed to push folks into going green. The tax credit is an excellent incentive for drivers to make the switch, but bear in mind that the process of qualifying and claiming said credit can be a bit overwhelming. Note that everything discussed above is meant to help demystify the EV tax credit and should not be interpreted as financial advice.

If you still have questions pertaining to your own situation, consider consulting a qualified tax professional. I’m just Joe.

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EVs explained

MPGe, all its secrets, and why you should (or shouldn’t) care

Take your seats because we have yet another piece of electric car jargon to decipher. This next one seems easy enough, right? MPGe is just another measure of efficiency to coincide with this new wave of alternative powertrains and electrified driving machines. Apples to apples, or so you’d think. In reality, MPGe is kind of a head-scratcher. Buckle up and get ready to hypermile through this course because today we’re answering the question: What is MPGe in electric cars, and does it matter?

With this lesson, we hope to better understand how we tally EV efficiency and if this figure has any meaning left sailing the sea of stats.

A starting explanation

Coined by the EPA in late 2010 for the first-generation Nissan Leaf, MPGe is the newfound measurement for efficiency in alternative powertrains, intended to be viewed as the go-to standard like traditional miles per gallon. In fact, MPGe stands for – you guessed it – miles per gallon-equivalent. How creative. You can truly read the whimsy in my voice right now. 

Image credit: Rivian, Edit: Jeric Jaleco

No, it’s not miles per gallon electric or miles per gallon even-though-it-ain’t-got-no-gas-innit.

Note that the term is equivalent and not electric, as the EPA uses it for a broad spectrum of powertrains, from plug-ins to hydrogen fuel cells. As such, cars like the Prius Prime and Toyota Mirai, while wildly different approaches, both measure with MPGe. However, the Prius Prime also measures fuel efficiency in standard miles per gallon for regular hybrid operation.

Akin to their fossil fuel counterpart, MPGe also comes in city, highway, and combined flavors. For instance, the Mirai ranks at 76 MPGe city and 71 highway, while the current-generation Nissan Leaf with a 40-kWh battery can achieve 123 MPGe city and 99 highway. The Prius Prime can measure as high as 133 MPGe in full EV mode. Not bad! On the other hand, a Hummer EV can only stretch to a meager 51 MPGe. Okay, pretty bad.

Image credit: fuelecononmy.gov

How is MPGe calculated?

To calculate MPGe, the EPA measures how much electricity is equivalent to the energy in one gallon of gasoline, which is roughly 34 kWh. Sources vary from 33.7 kWh to just a tick over 34 kWh, but let’s just round it to a nice, even 34 kWh. Then you take that gallon of gasoline-equivalent and compare that with the total miles covered.

The Wikipedia article on this subject has a unique formula drafted for visual learners, plus a chart to help calculate the MPGe of other fuel sources.

If, say, an EV achieved 50 miles of range on that roughly-34-kWh reserve, that’d be equal to 50 MPGe since it’d take a gallon of gasoline to cover the same distance. If the vehicle travels 80 miles off that same energy reserve, that’d be 80 MPGe, or 100 MPGe if it did 100 miles.

Image credit: fueleconomy.gov

As you can imagine, vehicles with lower numbers are less efficient than rivals with higher ratings. Their MPGe figure is the star highlight of their energy efficiency, denoting how far they can travel on a certain amount of juice. It’s no different than miles per gallon with cars in this sense, except the numbers will often be far higher as electric powertrains are leaps and bounds more efficient than internal combustion engines due to them not suffering as much heat or friction losses.

Don’t be so taken aback by frequently seeing figures deep in the hundreds. Eliminate these losses in your gas-powered car, and you’ll probably see 80 miles per gallon all day.

Does MPGe actually matter, or is it a waste of our time?

Uh. Yes. And also kinda-sorta, yes.

Despite its intended role, many folks remain unconvinced of its usefulness. The same seems to be true with manufacturers, as you have to dig through a page or two before you land on their MPGe figures. Even Google doesn’t immediately list MPGe as a primary stat for many prominent EVs.

That’s not entirely the EPA’s fault, as all it did was craft a somewhat relatable measurement to help potential buyers decipher this new wave of high-voltage transportation. However, one disadvantage MPGe has that its fossil fuel counterpart doesn’t is an inconsistent and unreliable ability to determine how much most EV owners can expect to pay at the pump.

Oh, sorry. Plug.

Image credit: Wikimedia Commons

Okay, so why is its usefulness kinda wishy-washy?

To quote the Car and Driver research staff: “You don’t have the luxury of that big sign at the gas station like you do when you fill-up the tank for a traditional combustion engine model, so how does that translate into electric costs?”

This impracticality partly stems from how wildly varying the costs of charging can be, from wall charging at home to fast charging on the go. Brands of chargers can also vary in cost, and even stations under the same corporate umbrella can fluctuate depending on location and how they charge for electrons. Some public stations may charge by the minute, while others go by the kilowatt-hour, with prices fluctuating nearly as much if not more than gasoline. Or, maybe you’re one of the few lucky Tesla owners I’ve met who’ve scored free charging access as part of the deal.

The other part also stems from the fact that MPGe is merely a newcomer stat that hasn’t quite settled into the minds of most buyers. What are we to do with ratings constantly in the 70s, 80s, or even higher? By that sense, we’d think Rivians and Hummers are poster children of eco-friendliness and electric car mileage – they’re totally not. And it doesn’t help that MPGe hardly gets any attention since the big ticket figures are always as follows: range first and foremost, and the battery pack’s kilowatt-hours a distant second. I can’t remember the last car review video I watched where they actually mentioned MPGe when these numbers were more readily available.

So what is MPGe best used for and can it be better?

So no, it’s not entirely useful as a multi-talented metric to determine overall ownership costs. At least not as easily. But it’s still damn good at its bare basic task: being a Top Trumps card on the showroom floor. In an age where it’s easy to get jumbled up with all the jargon out there, keeping it simple with MPGe and using it as a cross-shopping tool, just like traditional miles per gallon, is the best way to use it.

Image credit: Wikimedia Commons

Neat! So these two EVs both rock 100 kWh batteries, but one gets 90 MPGe versus its rival’s 80? Winner! Compare and contrast, folks. Of course, don’t forget to take in things such as the kilowatt-hours of the battery pack, as that’s akin to the tank capacity of an ICE-powered car.

For those looking to simplify even further, there are promising solutions out there. As pointed out by fellow auto journo, Kevin Williams, why even bother doing the math to convert to gallons now that there’s a better understanding of kilowatts and kilowatt-hours out there? Williams proposed measuring in miles per kWh, eliminating a step in the formula, and aligning the efficiency stat with the kilowatt-hours we already use to measure battery energy.

But I guess that’s none of our business, EPA. I just write here.

Recap before recess

So remember, MPGe stands for miles per gallon-equivalent and is the unit of measurement for energy efficiency in alternative powertrain vehicles. For over a decade, it has been a common, if overlooked, data point for electrified cars. It bases its numbers on how far an EV can travel with the electric equivalent of a gallon of gas, approximately 34 kWh. However, unlike traditional miles per gallon, the roller coaster of price variations for charging hinders its usefulness in giving consumers a concrete dollar amount they can expect to pay. Even so, it proves competent for cross-comparisons and measuring how well EVs can use their electrons when stacked against their peers.

Image credit: Polestar, Edit: Jeric Jaleco

Pretty standard stuff, eh? Underwhelming, sure. But at least MPGe presents itself as an easy-to-grasp, easy-to-use metric as long as you treat it no differently from how you’d treat its traditional counterpart on the Monroney. Or you could say screw it in favor of total range and kilowatt-hours. Or you could pretend you never read any of this and keep going about your merry way. You’d be just fine either way with all the other data points out there to decide which EV is best for you. But never forget that EVs aren’t too dissimilar from gas burners in the sense that some cars are more miserly than others.

Because it’s nice to know a Polestar 2 makes far better use of its battery than that leviathan of a Hummer – for obvious reasons.

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EVs explained

Steer-by-wire has a bold future plagued by a rough history

Welcome back, and take your seats! Gather around as we prepare to dive into yet another cog in the grand machine that is electric vehicle technology. Today’s lesson is all about steer-by-wire. That’s right. It’s all about that bastard child of engineering and computer nerdery that has the underwear of purists everywhere in a bunch but the eyes of the tech-savvy glistening with excitement. 

Now, tell the therapist how that assortment of words makes you feel. Enthused? Enlightened? Or are you feeling rage and disapproval at how car companies are soiling one of the last vestiges of tactility behind the wheel. This relatively-fresh flavor of steering is a perplexing and divisive topic, occasionally covered by everyone from auto mags to, uh, wait, banking institutions? Seriously?

Right. Well. To understand steer-by-wire, we must know where it came from and what are the things it gets terribly wrong and oh so right. After all, luxury marques were the first adopters only to phase it out, assign it new purposes, or completely halt its takeover. It has since become synonymous with electric cars as years pass, and the current iterations, which number few and far between, paint themselves as wayfarers leading us towards a new era of automotive engineering.

So what’s the hubbub with steer-by-wire? Why so much unrest, and why is it even still here? Let’s find out with yet another chapter in the EVs Explained handbook.

Original Image: Chevrolet/Edit: Jeric Jaleco

What is steer-by-wire?

Tell me what you think. I assure you that such tech is exactly what it sounds like. Steer-by-wire is fully-electronic steering controlled by, that’s right, wires. And also computers, can’t forget that. Aside from a tangible steering wheel or emergency failsafe steering shaft, there are no analog doohickeys whatsoever. The steering wheel is not directly connected to the front wheels versus traditional cars with more common power-assisted racks.

Think of an old Logitech steering wheel, an arcade game, or a cheap racing sim. It’s sort of like that with the intent of thrusting cars further towards enhanced safety and convenience.

Image credit: Infiniti

Okay, okay, but how does steer-by-wire work?

Kind of video-gamey. 

The steering wheel sends a signal to a computer to decide how much steering input to provide. The computer(s), typically one or more dedicated ECUs, send these signals to control the actuators, which either work a steering rack or each wheel, to provide the appropriate amount of steering angle.

Steer-by-wire is not to be confused with electric power steering, which utilizes a traditional column and rack assisted by an electric motor. And it’s an astronomically far cry from your run-of-the-mill hydraulic power steering, which relies on an engine-driven hydraulic pump.

Lotus fans have been seething since the first paragraph, I know. I encourage you to take your daily dose of copium now. I’m right behind you.

The origin of steer-by-wire’s villain arc

Truthfully, there was nothing spectacular about the debut of steer-by-wire in cars. No grand history lesson. No lost tale of a forgotten start-up on the second page of Google. It was very much indeed the 2014 Infiniti Q50 sports sedan to be the first to launch with such a system, dubbed Direct Adaptive Steering, and it did so to a lukewarm reception.

It’s not an objectively bad method of turning the wheels. In fact, it did the job quite well. The wheels definitely did turn, oh yes they did. How it changed in terms of subjective measures, however, stirred heaps of controversy and dismay.

To summarize it in the best way my generation knows how: dogshit. If anything, early steer-by-wire was described as decent as the utmost attainable compliment.

Image credit: Infiniti

At launch, a Motor Trend writer panned the fresh technology as “– artificial, disconnected, and even unpredictable.” These thoughts were revisited in their long-term test conclusion nearly two years later, as they described one staffer’s difficulties with placing the Q50 on the road. Another writer at Car and Driver expressed similar disdain, calling the DAS-equipped Q50 “wayward and lacking,” later noting how the standard electrically-assisted steering forgoes these problems for a more predictable experience.

Alas, Nissan would heed their words. After years of trying to ween it into traditional passenger cars, they would discontinue the system altogether. Infiniti ditched its innovative-but-flawed idea in less time than it reportedly took to develop.

But steer-by-wire had planted its roots, finding uses in other classes of cars and in niche safety and performance systems. However, while constant updates and refinements ironed out some skittishness, the core criticisms of nonexistent feel, inconsistent ratio tuning, and overly-artificial weight remain. No longer are these systems under such immense flak, but they haven’t risen to upstanding citizenship either. 

“Maybe I don’t want to be the bad guy anymore.”

Yet, despite its rough maiden voyage, the history isn’t all first-model-year woes and half-baked programming. There were clear reasons for developing steer-by-wire and why it’s still tinkered with today in everything from EVs to endurance race cars. Steer-by-wire was ho-hum at its best then. Now it’s seeking to right its wrongs and position itself as the prime choice for a few select audiences before eventually tackling the entire car market. 

In an ideal industry, we’d allow drivers to keep traditional steering systems, but we’d also let the automakers continue to cook. First-time recipes are always dicey, just like the first EVs. But put in the practice, and they’ll become worthy of a Michelin Star. Look at how we’ve progressed from the Mustang II to the Dark Horse or from the GM EV1 to the Lucid Air Sapphire. Let. Them. Cook.

That said, there have been three core values behind implementing steer-by-wire. Ones that ought to capture some attention and garner at least a teaspoon of respect for the companies trying to make this magic work: safety, steering responsiveness, and use in EV and autonomous vehicle development. 

Safety first

From the safety side of things, a total steer-by-wire system eliminates the need for a physical shaft connecting the rack and steering wheel. Good for taking away one more potential hazard from thoracic injury, which is fancy-schmancy med school talk for “spearing you like rebar through Jamie Foxx’s chest in Baby Driver.” Of course, collapsible steering columns mostly negate those worries, but removing the shaft altogether can further seal the deal. 

Steer-by-wire also works wonders for active safety systems. For instance, lane-keep assists or lane-tracking cruise control can easily nudge your steering to make the appropriate corrections. Or you know. Just ping pong you for being a dweeb who can’t drive straight. But hey, they’re working on that.

Video credit: Lexus

Not quite a safety concern but rather one of driver convenience, the variability and adaptability of steer-by-wire enables impossibly light steering weights and quick ratios. This makes them theoretically ideal for urban maneuverability, as Lexus is seeking to prove with their system’s 90-degree turns. Such an epiphany led some automakers to get particularly… cocky… with their steering wheel designs, which arguably can hamper safety as much as steer-by-wire helps it. 

Ahem. Yolks aren’t cool, yo. Don’t even think about it, Mercedes.

Image credit: Infiniti

Suppose this technology betrays us and decides to take the day off from functioning. In that case, failsafes built in, such as a clutch pack that engages some physical emergency connection, as Infiniti had done (note the emergency shaft pictured above). However, Toyota is taking a bold step forward with their bZ4X and Lexus RZ450e. You can spec an optional steer-by-wire system rocking zero mechanical connection (note the lack of any shaft pictured below). Instead, these EVs don small auxiliary batteries solely for the steering system to ensure the car can still maneuver, no matter the electrical failure.

Image credit: Lexus

Drive harder, steer faster.

From the steering response corner, steer-by-wire enters the ring with the potential to react far quicker to inputs than any traditional rack, as the need to twist a metal shaft side to side, regardless if it’s by an electric motor or hydraulic pump, is no more. In theory, this allows for a more dynamic driving and playful experience or, going back to safety, quicker emergency lane changes. 

Full circle, see?

Since you’re relying on electrons moving along some copper wiring, you shouldn’t worry about suddenly “running out” of assistance during hard driving because a motor can spin fast enough or a pump loses pressure. This enhanced precision and speed have earned current steer-by-wire systems a place in the motorsports arena, having been wielded by DTM race cars and variants of stars like the Mercedes-AMG GT3 and Porsche Cayman GT4 race cars.

Here’s an especially exciting one! Technically speaking, steer-by-wire controls the rear-wheel steering systems in luxury and high-performance vehicles from brands like Porsche, Rolls Royce, Ferrari, Audi, and way more. It’s a far cry from hydraulic rear-wheel steer systems of old, such as the Nissan Skyline’s HICAS system.

“Squidward! Robots have taken over driving!”

Not the driving!

The age of autonomy is upon us, and we’re in its infancy. Soon, all our cars will belong to Skynet.

Kidding. They’ll have to fight me first. But for now, these robotized commuters can continue toddling around my home city with their goofy radars and cameras. They’re a test bed for honing steer-by-wire, the next ace up their sleeves.

Autonomous cars, and by extension electric cars, have become the prime host for steer-by-wire systems in the next wave of daily drivers for reasons that may be obvious. Deleting an electric power steering motor and shaft not only ditches complexity. It sheds weight and potentially higher power draws, further enhancing the efficiency of an EV. That means more range! And the infinitely tunable and variable steering that plays so well with driver assists bodes well for further developing autonomous driving.

Image credit: Wikimedia Commons

Steer-by-wire can react quicker to the needs of radar, cameras, and lidar and is superior for this specific use case, hence why it’s the steering system of choice for systems like Tesla Autopilot and GM Supercruise. And once we’ve perfected autonomous cars in probably 80 morbillion years (that’s a number now, I said so), steer-by-wire will allow for removing the steering wheel altogether to increase cabin space and possibly cut production costs. 

Grim for enthusiasts, yes. It’s a real Cyberpunk 2077 and Watch Dogs: Legion-type beat, but it’s the endgame of autonomous vehicle engineers in the somewhat distant future. As for today, you can see steer-by-wire, whether optional or standard, equipped onto vehicles such as the Toyota bZ4X and Lexus RZ450e twins, the GMC Hummer EV and Silverado EV power duo, and all Teslas. Mercedes is due to follow suit with revised versions of the S-Class and EQS.

And I suppose used Q50s with Direct Adaptive Steering at your local buy-here-pay-here lots count too.

Image credit: Mercedes-Benz

Ding, ding, ding, class dismissed!

In case I lost anyone, know automakers introduced steer-by-wire as a fully electrified steering system using ECUs, actuators, and wires instead of a traditional power-assisted rack. Deleting an electrically or hydraulically assisted steering shaft allows for greater mechanical simplicity, improved safety, and a broader spread of tuning capabilities for dynamic or comfort purposes.

The public ostracized steer-by-wire at launch for feeling wonky and unnatural in luxury sports sedans it debuted in. It eventually found its way into electric and autonomous vehicles. You can thank its efficiency and ability to mesh with a plethora of driver assists and semi-autonomous tech. Its subjective criticisms in traditional cars have persisted for years, but it has now proven to be a core component in fully-autonomous car development. 

To this day, only a handful of road cars and a few race cars feature steer-by-wire. They do so confidently, seeking to advance the species.

Image credit: Lexus

Them got dang robot cars is a coming!

Sure. But it won’t be any time soon as the technology continues developing and experiencing its share of hiccups and triumphs. Now we have a greater understanding of what it is. But is steer-by-wire the ultimate endgame at the mall parking lot or autocross course? Not today, it’s not.

Steer-by-wire, once arousing so much skepticism, is now striving for greatness in growing fields that welcome it with open arms. Still controversial, yes, but it’s here to stay alongside the old-school power steering enthusiasts undeniably love and commuters already know.

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EVs explained

Level 1 vs Level 2 vs Level 3: Everything you should know before charging an electric car

Sales of electric vehicles (EVs) have exploded in the last few years, with the proliferation of charging stations following suit. As developments in infrastructure, clean energy, and climate legislation bring us closer to an all-electric future, it’s important to understand the charging technology that will eventually take the place of filling up on fossil fuels.

In this guide, we’ll walk you through the different charger levels, the distinctions between plug-in and hardwired chargers, as well as how to install an at-home EV charger. If nothing else, you’ll know the basics the next time you book a rental car in Europe – after all, driving a Tesla in Iceland will spare you $9 a gallon.

Level 1 charging

Image credit: Lectron

Most EVs come with a basic level 1 charger. It plugs into a standard (120V) power outlet much like any other ordinary household device. Generally, it doesn’t require any special installation – you just plug it into the wall. Compared to Levels 2 and 3, a Level 1 will move slowly, hence the nickname “trickle chargers.” When fully depleted, a Level 1 can take a day or longer to reach full charge. Despite its low charging speeds, it can still be useful for overnight charging. If you only use your car sparingly, or you predominantly use public chargers, a Level 1 charger may be all you need at home.

It’s important to note that Level 1 chargers aren’t as energy efficient as Level 2 chargers and will cost more to fully charge your vehicle. But, generally speaking, Level 1 charging is still cheaper than fueling a traditional gas-powered car.

Price: Up to $200, but one usually comes with the vehicle
Power output:
1.2 kW
Charging Speed:
5 miles per hour or less
Power source:
120V outlet

Level 2 charging

Image credit: JuiceBox

Level 2 charging is the most popular way to power up an EV. Found in both public places and personal residences, Level 2 charging speeds typically range from three to 12 times faster than Level 1. They’re increasingly common in public places such as shopping centers and office parks, with over 54,000 Level 2 chargers added in the U.S. in 2022.

When choosing a Level 2 charger, you may want to make sure the amp rating isn’t higher than that of the vehicle. It won’t harm the car, but any additional power over that threshold won’t charge it any faster. You can find the amp level your EV will accept in your owner’s manual and compare it to the amp rating of the charger you’d like to buy.

Level 2 chargers are designed to work with most vehicles, so compatibility usually isn’t an issue. In North America, chargers either come with the J1772 connector or the proprietary Tesla connector. Tesla vehicles also include a J1772 adapter. So with rare exceptions, you can just about use any Level 2 charger with your EV. In Europe, chargers usually come with the Type 2 (Mennekes) connector which is the standard for all EVs sold in the region, including Tesla.

Price: The price typically ranges from $300 – $800 for home units. Some cars come with a Level 2 charger.
Charging speed:
12 to 70 miles per hour of charging
Power output:
3.3 kW – 19.2 kW
Power source:
240V outlet

Guide to installing Level 2 chargers

Plug-in vs hardwired

Level 2 chargers come in two types: plug-in or hardwired. Those that plug in use a 240V outlet — typically used for large appliances like washing machines and ovens. Others need to be “hardwired” or directly integrated into your home’s electrical panel. Should you have a compatible 240V outlet handy and you’re employing a low-amp Level 2 charger, the setup could be as straightforward as plugging it in. However, in most cases, you will need to hire a professional.

Plug-in chargers

When plugging in a Level 2 charger, you need to ensure that:

  • The outlet is compatible with the charger.
  • Both the outlet and circuit board have a sufficient amp rating (at least 25% higher than the charger’s maximum amp draw).

In North America, most 240V outlets are NEMA outlets. By and large, the NEMA outlets used by EVs come in the following amperage ratings:

  • 30 amps (NEMA 14-30)
  • 50 amps (NEMA 14-50 or NEMA 6-50)

If you’re unsure about any of this, you should consult an electrician before charging with a 240V outlet. It can be potentially dangerous to plug a level 2 EV charger into an outlet if your home can’t handle the power draw.

Hardwired Chargers

Hardwired chargers are mounted on the wall and include three feet of flexible conduit and service wires that extend from them. These wires meet and connect to the wires coming from your electrical panel.

Hardwired units are more expensive, but they have a watertight connection. Offering protection from the rain and the elements, they’re suitable for outdoor use. Normally, they’ll deliver a larger range of amp and charge-speed options than plug-in units do, too.

Ultimately, you may want to install a hardwired charger. This might be because you are looking for outdoor charging or if you don’t have a suitable 240V outlet available and don’t want to have one installed. On the other hand, plug-in chargers are portable, so you should keep in mind if you will need to charge your vehicle at multiple locations.

Hardwiring or installing a 240V outlet

At any rate, you may want to either install a 50-amp outlet or have your charger hard-wired into your home’s electrical system. Either option will generally require the assistance of a professional electrician, both for the installation process and to determine whether your house can handle the energy draw. Installing a 240V outlet is a technical and risky operation that’s subject to strict regulations and approval.

Many residential households are not equipped for the power draw of Level 2 chargers, in which case your service panel may need to be upgraded or changed. If the charger is being installed outdoors, it needs to be rated for outdoor use. You will likely need to get a permit from your local building department before you start the installation. After the installation, an inspection may be necessary to ensure the work meets local building and electrical codes.

How much will it cost for the installation?

This can vary dramatically based on a number of factors, such as how far the panel is from the installation point of the charger. If both your panel and charger are to be in the same place (such as the garage), then it might only cost a few hundred dollars. But, depending on the complexity of the installation, the price could rise to well over $1,000. Thankfully, many states and municipalities offer rebates and other incentives for installing EV chargers that can help offset these costs.

Safety and maintenance

Always install chargers in a well-ventilated area to prevent overheating and keep away from flammable materials. Check the charger periodically for signs of wear and tear, especially if it’s installed outdoors.

Level 3 charging (DC charging)

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Level 3 chargers are found in public and commercial areas and are operated by private charging networks like Tesla and Electrify America. Private residences are not suitable for installation.

Level 3 chargers are very fast; they can charge up to 15 times as fast as Level 2 chargers and may fully charge a car in less than an hour. This makes them very useful if you’re in a rush and need to charge quickly. But there are some trade-offs to the increased speed. The cost-efficiency of Level 3 charging is lower than Level 1 and Level 2, so it will be more expensive to achieve a full charge. Level 3 charging can also gradually degrade a vehicle’s battery health, so it’s generally better to use public Level 2 chargers when time allows.

Different charging networks and EV manufacturers use different types of connectors. The most pervasive examples include CHAdeMO (used by Nissan and Mitsubishi), CCS (used by European and American manufacturers), and Tesla’s once-proprietary Supercharger connector, which everyone from Rivian to Ford and General Motors is starting to adopt. Some public charging stations provide multiple types of connectors, but not all. You must also consider compatibility. Many older or cheaper EV models don’t support DC charging.

Price: Often $10,000+
Charging Speed:
120 to 1,200 miles per hour of charging
Power Output:
50 – 350 kW

Future of EV charging

Europe and China are taking the rise of EVs seriously, and are preemptively building infrastructure to prepare. 450,000 new EV chargers were installed in Europe as of April 2023, a growth rate of over 50%, and the rate of EV charger installation in China has been even more dramatic.

While the US sadly lags behind both Europe and China in this area, it’s still experiencing significant growth in both the number of EVs and charging stations. By 2030, the Biden administration says we’ll have 150,000 to 500,000 charging stations by 2030. With charging infrastructure rapidly expanding, the days of limited charging access are finite, and soon enough range anxiety, too, will become a thing of the past.

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