On July 28, 2022, US Senator Joe Manchin agreed to back the latest version of the major climate spending bill that includes $369 billion for climate and energy measures, the “biggest check for clean energy the US has ever cut”. What does this new Senate Democratic deal mean for the electric vehicle movement?
Joe Manchin and Senate Majority Leader Chuck Schumer announced the deal, which includes a $4,000 tax credit for used electric vehicles and other new tax credits and grants for automakers to retool factories to build greener cars. The deal will also expand the $7,500 EV tax credit and a new $10 billion investment tax credit to build clean-technology manufacturing facilities.
$2 billion in cash grants will go to auto manufacturing facilities to manufacture clean vehicles, “ensuring that auto manufacturing jobs stay in the communities that depend on them”.
This deal is a win for automakers who have lobbied for an extension of the EV tax credit and will allow them to further their progress towards cutting emissions. They’ve noted that they cannot “meet aggressive goals to cut emissions without tax incentives that make electric vehicles more cost competitive”.
The new EV tax credits are for trucks, vans and SUVs with a suggested retail price of below $80,000 and for cars, no more than $55,000. They are also limited to families with adjusted gross incomes of $300,000 annually.
For the U.S. Postal Service, $3 billion will be provided for purchase of zero-emission vehicles and EV infrastructure.
It’s important that Congress recognizes the investments necessary to advance their clean energy agenda. Democrats believe that expanding tax credits will help shift Americans away from gasoline-powered vehicles. Will the credits help advance Biden’s target of making half of all new vehicles sold in 2030s EVs or plug-in hybrids?
