Federal programs are supporting EV adoption in the US
Since they first hit the market in the late 1990s, all-electric and hybrid-electric vehicles have steadily climbed in popularity to become the latest innovative trend in automotive technology. Aside from increasing affordability and reliability, a key driving factor behind the spread of EVs is a range of federal laws, tax incentives and programs designed to encourage drivers to switch to more sustainable modes of transportation.
To find out more about the ever-changing legal landscape behind EV use and regulation and how it can affect you, take a deep dive into current federal laws affecting electric and sustainable vehicles in this guide.
An Introduction to EV Tax Incentives
Since 2010, several tax credit programs have been introduced to benefit those buying a new EV. Perhaps the most notable of these has been the Internal Revenue Service’s Plug-in Electric Drive Motor Vehicle Credit. This tax regulation offers EV rebates ranging in value from $2,500 to $7,500 on all qualifying EVs using a traction battery assembly with an output of at least four kilowatt-hours (kWh) and up to 14,000 pounds in weight. The original IRC 30D provision expired in August 2022, but vehicles purchased before December 31, 2022, still qualify, provided that the final assembly took place in North America.
From 2023, a new rule will come into effect offering a further $3,750 tax credit for vehicles that contain critical minerals sourced from the United States or jurisdictions in free trade agreements with the U.S. In simple terms, as long as the vehicle uses lithium, cobalt, manganese, nickel and graphite from the U.S. and its trading partners, you can expect EV costs for new purchases to drop even lower.
You could also qualify for EV incentives such as the Clean Vehicle Tax credit if you’re purchasing an electric vehicle for your business.
Recent Developments in Federal EV Law
The Inflation Reduction Act (IRA) of 2022, introduced under the Biden Administration, makes several significant changes to federal laws. Its aim is to reduce carbon emissions, improve infrastructure and decrease dependence on foreign energy sources by promoting domestic green energy solutions and other sustainable products. On top of confirming the previous maximum $7,500 tax credit for new EVs, it introduced a $4,000 tax credit for used electric vehicles. New EVs must be produced by manufacturers building less than 200,000 units per year. Also included were incentives for all-electric and hybrid-electric commercial vehicles.
Furthermore, in recognition of the difficulty many EV drivers have in accessing public EV charging stations, the Biden Administration has committed to building half a million new charging stations across the country, using portions of the $1 trillion infrastructure fund. This represents a huge increase over the nearly 50,000 stationsalready in place, making it far easier for EV drivers to power their vehicles. Many of these new stations will be placed at intervals of 50 miles along the Interstate system in every state under the terms of the National Electric Vehicle Infrastructure (NEVI) program.
Another interesting feature of the IRA is that it sets aside $20 billion to fund new clean vehicle manufacturing facilities and a further $2 billion to reconfigure existing production facilities for clean vehicle manufacturing. That means the supply of affordable electric vehicles is set to increase sharply in the coming years, almost certainly making the cost of new and used EVs likely to fall within the means of drivers who otherwise couldn’t afford one. Electric vehicle technology may also see increasing support from state governments as part of their commitment to limiting and regulating emissions under the Clean Air Act.
The Future of Federal Electric Vehicle Law
The Inflation Reduction Act, the Clean Air Act and federal tax codes are only the start of a promising future for EVs across the country. Widespread adoption will depend on a growing body of laws and incentive programs that make electric vehicles more affordable, practical and widely available to Americans in major metropolitan areas and rural regions alike.
Several recently introduced bills could form a broader legal infrastructure for EV technology. The Growing Renewable Energy and Efficiency Now (GREEN) Act,introduced in 2021 by Representative Mike Thompson of California, would allow electric vehicle manufacturers to produce more cars qualifying for tax credits, extend tax breaks to purchasers of used EVs, and set up a tax credit for manufacturers of heavy-duty electric vehicles, charging stations and home EV chargers.
Another bill of note is the Strategic EV Management Act of 2022, sponsored by Senator Gary Peters of Michigan, which would require federal agencies to establish new strategies for federal EV fleet battery maintenance. These and other less sweeping bills will, if passed, be among the earliest elements in a comprehensive legal framework supporting the EVs of the future.
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By evee Life Contributor
Published November 2, 2022 8:17PM
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