Bloomberg News reports that every individual working on issues related to energy and climate is on their toes in the US, working intensely on the Inflation Reduction Act, hunting for smoke signals as to whether it is suitable for being passed or undergoing any modification. For many sectors of the green economy, the bill will benefit, including the division of electric vehicles. A few important takeaways offered by experts are pointed out here.
Tax Credit Extension
Especially for Tesla, Toyota, and General Motors, the $7500 tax credit revival is a big deal. All three companies have sold 200,000 vehicles that qualify for the incentives once the system comes up. Once the automakers have crossed the threshold point, the buyers of cars of those automakers begin to receive reduced credits, and gradually none. Nissan and Ford are approaching this point too.
The bill would also allow them to enjoy the full incentive next year and at the time of sale instead of the tax season. Those automakers that have sold fewer EVs than the above figure might have been upset by seeing the 200,000-vehicle cap lifted. However, most carmakers should be happy since, eventually, there will be a tightening of fuel economy regulations.
Requirements for qualifying
In the automaker board rooms across the nations, it is quite likely that requests will make their rounds in the organization and among suppliers to find out which car models would be eligible and how fast sourcing will take place.
A springboard for commercial electric vehicles
Bloomberg News reports that new commercial electric car provisions will permit vehicles that weigh less than 14,000 pounds to avail of the $7500 clean car tax credit. As far as heavier vehicles are concerned, they can have the lower of the two figures, a 30% differential between a comparable internal combustion engine and a clean vehicle, or an incentive of $40,000.
This would entirely cover the price of a 150-250 kilowatt-hour battery pack these days, and as the prices drop, it will do so more. This would further boost the nascent or young US commercial electric vehicle market, which is a little behind China and Europe in many segments.
The bill also comprises as much as $3 billion to aid the US Postal Service in decarbonizing its fleet and migrating to electric vehicles.
Loan Programs
The package also comprises $2 billion to aid auto manufacturers in rebuilding and converting the existing setup for manufacturing vehicles and allows about $20 billion in the loan amount. This amount will help the companies build cleaner and newer facilities across the US.
The bill would also help in building a sense of scale. It would also allow the extension of the EV Tax credit to 2032.
