As many IRA tax credits for electric vehicles approach expiration or become more limited, some fleet operators may feel uncertain about how to proceed with their fleet modernization plans. The question arises: does it still make sense to invest in fleet electrification today?
In reality, this is a surprisingly excellent moment for businesses to begin electrifying their fleets. While the One Big Beautiful Bill (OBBB) has significantly reshaped the clean energy landscape, it also includes powerful incentives—particularly accelerated tax deductions and infrastructure-related benefits—that provide a substantial strategic advantage for companies ready to modernize their vehicles and charging systems.
These new and remaining mechanisms offer opportunities to offset upfront costs and accelerate a more cost-effective transition to electric mobility.
- The 100% Bonus Depreciation rule, reinstated and made permanent by OBBB, allows the full cost of eligible fleet vehicles, charging stations, and supporting infrastructure to be written off in the year the asset is placed into service.
- No Dollar Cap: There is no limit on the total amount that can be deducted, making it especially advantageous for large-scale fleet electrification projects.
- Maximized Tax Savings: This provision often provides greater total tax savings compared to traditional tax credits.
- Reduced Net Project Costs: Immediate deductions significantly lower the overall net cost of electrification investments.
- Improved Cash Flow: Accelerated tax benefits enhance near-term cash flow for businesses.
- Faster Return on Investment: These accelerated deductions support a quicker payback period for electrification projects.
- Note: While the federal bonus depreciation rule is permanent, many states may not conform to this rule – check ahead of time.
- The Section 179 Deduction Limit was increased, allowing businesses to deduct up to $2.5 million (in 2025) for qualifying assets—including electric vehicles and charging infrastructure—in the year those assets are placed in service.
- Offset Upfront Costs: Businesses can offset much or all of the initial investment in both vehicles and charging equipment with immediate tax deductions.
- Combined Incentive Power: When used together, Section 179 and bonus depreciation provide immediate, scalable, and stackable tax savings for fleet electrification projects.
- Surpasses IRA Credit Limitations: Unlike IRA credits, which have per-vehicle caps and faster expiration timelines, these deductions have no per-vehicle limits and apply to both vehicles and infrastructure.
- Enables Large-Scale Projects: This framework allows companies to maximize financial leverage for significant fleet and infrastructure upgrades before incentive windows close.
- Note: Unlike bonus depreciation, these deductions are limited to the business’s taxable income for the year.
- Several IRA EV tax credits, including the commercial clean vehicle credit and the individual clean vehicle credit, are set to expire or become much more limited beginning in September.
- Valuable Per-Vehicle Credits: Eligible purchases can qualify for up to $7,500 for light-duty vehicles or up to $40,000 for commercial vehicles—substantially reducing upfront costs.
- Align Purchases for Maximum Benefit: Many new EV models (both passenger and commercial) still qualify if placed in service before upcoming changes take effect, making now the ideal window to secure federal support.
- Complementary to Other Incentives: These credits can be combined with enhanced bonus depreciation and Section 179 deductions for even greater savings.
Program comparison for selected fleet examples:
How is the bonus depreciation calculated
This is the perfect moment to harness the technological advantages of electric vehicles—not only for superior fuel efficiency and reduced maintenance costs, but also for significant tax deduction savings available today.
Leke Services can help you quantify exactly how much you could save with an initial fleet electrification program. Book a call with us to start your tailored savings analysis.
