5 Things to Know About the EV Provisions in the Inflation Reduction Act

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The Inflation Reduction Act of 2022 (the “IRA”) was signed into law today. Its EV incentive provisions could give a huge boost to the transition beyond gasoline. Here are 5 things you need to know:

1. New EVs are eligible for a federal tax credit of up to $7,500 per vehicle through 2032.

2. Half the tax credit is available if a certain portion of the EV’s critical materials are from the U.S. or a free trade partner or are recycled in North America. The other half is available if a certain portion of the vehicle’s battery’s components are made or assembled in North America.

3. There’s a price cap for the purchase of new EVs ($80,000 for SUV, trucks and vans, and $55,000 for all other vehicles) and an income cap ($150,000 for single filers and $300,000 for joint filers).

4. The dealership can give the tax incentive up front in the form of a discount.

5. Used EVs are eligible for a $4,000 tax credit, with a vehicle price cap of $25,000 and an income cap of $75,000 for single filers and $150,000 for joint filers. There are no sourcing requirements.

Electrek provides a good explanation and list of EVs that are likely to qualify for the tax incentive in 2022 and 2033.

Now that you know the basics of the federal EV incentive, check out the additional incentives available in your state to learn the grand total of what you could save by switching to an EV.

Massachusetts Sets 2035 Deadline for Phasing Out Gas Cars

Massachusetts has enacted a sprawling climate bill requiring a 50% cut in emissions by 2030 – a target which can only be met by ultra-high levels of EV adoption by 2030. In addition, the bill requires the state to plan to rapidly electrify its transportation system to meet its 2030 climate goals and sets a 2035 deadline for phasing out new gas cars. 

Coltura’s Massachusetts partner Green Energy Consumers Alliance was a key proponent of the legislation.

Consumer Reports Survey on EVs

More than a third of Americans would “definitely” or “seriously” consider buying or leasing an electric-only vehicle) if they were to buy a vehicle today, according to a national survey conducted by Consumer Reports. Here’s why:

• It costs less to charge an EV than to refuel a gas car 

• Overall lifetime costs are lower 

• Maintenance costs are lower 

The survey, conducted prior to the spike in gas prices, shows a growing number of consumers are eager to buy a battery electric vehicle, especially if EV ownership concerns are addressed, such as creating greater access to charging, extending vehicle range, and lowering purchase prices. Almost half of respondents also reported being unaware of existing federal and state incentives that would defray the purchase price of many EVs.

Help Coltura Advance the Beyond Gasoline Movement

Coltura’s 2021 report, “Gasoline Superusers,” illuminated for the first time the unequal distribution of U.S. gasoline consumption and the difference in climate, equity, and financial impacts of switching to an EV for a Superuser as compared to an average driver. The report was featured in The Washington Post, the Volts podcast, and many other publications, and was the subject of reports by the Niskanen Center and JP Morgan.

Now, Coltura is developing the world’s most detailed analysis of consumer gasoline use based on millions of vehicle records and other datasets, including zip-code-level demographics and insights into preferred vehicles, driving patterns, and perceptions and attitudes about EVs.

Please make a donation to Coltura to support this work and our many other ambitious projects aimed at changing policy and culture around gasoline use.

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