When President Biden leaves office in January, his successful campaign to accelerate electric vehicle adoption will be remembered as a central feature of his environmental legacy. The Inflation Reduction Act (IRA) was a monumental achievement in the global effort against climate change, and the historic legislation included provisions designed to boost EV sales in the United States, jumpstart EV manufacturing capacity in North America, and support the proliferation of adequate charging infrastructure. The proactive investments were augmented by the remarkable achievements of the Environmental Protection Agency and the National Highway Traffic Safety Administration, which share responsibility for the mitigation of tailpipe carbon dioxide. In less than four years, the two agencies reversed the actions of the previous administration and finalized responsible standards for vehicle emissions and fuel economy that will govern the auto industry through 2032.Those of us who advocate strongly for EVs out of concern for the environment owe a great debt of gratitude to President Biden for the supportive transportation policies enacted by his administration.
The IRA included thoughtful provisions that improved the availability of federal tax credits to conscientious consumers who purchase a qualified EV. A $7,500 Clean Vehicle Credit can subsidize a new EV, and pre-owned EVs are now eligible for a $4,000 credit. As of January, the incentives are awarded at the point of sale and taxpayers can no longer be denied the credit because of insufficient tax liability. When the new credit was initially implemented, restrictions designed to bolster EV manufacturing within North America disqualified numerous EV models, but the list of qualified models is now quite extensive and will continue to grow as automakers adjust to the new restrictions. Under a separate provision of the IRA, consumers interested in a disqualified model can pocket similar savings by leasing their EV instead of purchasing it.
The Clean Vehicle Credit dovetails with other provisions of the IRA that support investments in EV manufacturing and related infrastructure. Some of the most significant include manufacturer production tax incentives of $35 per kWh for U.S. production of battery cells, $10 per kWh for U.S. production of modules, and ten percent of production cost for U.S. made critical minerals and electrode active materials. These substantial tax incentives have catalyzed huge investments in U.S. battery manufacturing and the Argonne National Laboratory now estimates that cell manufacturers here in the United States could supply 10 million new EVs per year by 2030. Similar funding from the IRA is leveraging private investment in charging infrastructure, supporting Biden’s promise to add 500,000 new public EV chargers by 2030.
The transportation sector is the largest U.S. source of climate pollution, representing 29% of our greenhouse gas emissions, but plug-in vehicle sales have risen from 308,000 in 2020 to 1,402,000 in 2023. Wise beyond his years, President Biden issued Executive Order 14037 in August of 2021, establishing a goal that 50% of light duty passenger cars and trucks be zero-emission vehicles by 2030. As his presidency nears its end, that challenging goal appears to be well within reach. Decades from now, when road transportation has been fully decarbonized, a grateful nation can look back with fondness on the foresight and vigor of our 46th president.
