US government issued over USD 1 billion in EV tax credits this year

One could have his or her opinion about EVs and the tax incentives the US federal government has placed over time, but one cannot deny its effectiveness. Since enactment of these incentives from January 1, they have helped save more than USD 1 billion of the cost of new EVs and enabled roughly 150,000 people to buy both new and used vehicles this year.

However, this USD 1 billion figure is devoid of leases, thereby inferring that the actual amount of monetary benefits is even higher if the leases segment is taken under consideration. This is likely the reason why these ‘incentives’ are more popular this year: Next year we hope to keep this October tax credit end of year ‘deal’ but a much bigger Joseph ‘Instant discount’ this year or point of sale stimulus.

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These incentives have played a big role in EV sales up to this point and have included the Biden Administration focusing on upgrading the charging stations for EVs and protection against foreign competition from EVs made in China. Federal tax incentives of up to USD 7,500 are in place and USD 3,750 is related to battery raw materials that are sourced in North America while the other USD 3,750 linked to vehicle assembly in the US.

However, developmental challenges still exist in regard to sustaining the promotion of EVs' adoptions. Improvement in the use of incentives across the globe cannot be entirely impelled by these incentives alone. Despite government investments in charging infrastructure for EVs, it has only led to small improvements in the number of chargers deployed. Tesla has recently dismissed employees, and now those who love their Model S electric cars praise the Supercharger; though other companies may soon emerge to fill any gaps that could result.

In conclusion, therefore it is hard to deny the fact that tax incentives have certainly played a very effective role in promoting the sales of EVs but at the same time it is equally important to understand that complementing the shortcomings in the infrastructure domain is equally important in crafting the fully-fledged experience of switching over to electric mobility.