(Washington, D.C. – March 31, 2023) The U.S. has reached another milestone on the route to a clean transportation future today with the release of a proposed rulemaking from the U.S. Department of the Treasury about tax credits for electric vehicles.
The Inflation Reduction Act provides tax credits of up to $7,500 for the purchase of new zero-emitting vehicles and $4,000 for buying used ones. Today’s announcement will help manufacturers and consumers determine eligibility for those credits.
“These tax credits for clean vehicles will play an important role in strengthening domestic supply chains and creating the U.S. jobs that will produce zero-emitting vehicles and their components,” said Alice Henderson, senior attorney for Environmental Defense Fund. “Tax credits will also drive down costs for American families, help protect their health from air pollution, and help us address the climate crisis. A massive investment in domestic electric vehicle manufacturing and job growth is already underway, and the announcement by the Treasury Department will further accelerate it.”
A recent report from EDF and WSP, U.S. Electric Vehicle Manufacturing Investments and Jobs: Characterizing the Impacts of the Inflation Reduction Act after 6 Months, found that the Inflation Reduction Act and other national policies have catalyzed already thriving investments in electric vehicle manufacturing in the U.S. More than $120 billion in investments and 143,000 new U.S. jobs have been announced in the last eight years, with more than 40 percent of those announcements happening in the last six months – since passage of the IRA.
The report also found that U.S. investments, production capacity, and jobs in the electric vehicle sector will likely continue to grow, especially in response to government actions expected in the future – including national vehicle emissions standards for cars, passenger trucks, delivery vans and buses. EPA is also expected to soon propose performance-based pollution standards for heavy-duty vehicles like freight trucks.
EDF filed comments with the Internal Revenue Service late last year urging timely implementation of the IRA’s tax credits and highlighting the need for provisions to empower consumers, especially those in marginalized communities, by providing accessible, clear information about the tax credits for both new and used vehicles.
The Treasury Department will now hold a 60-day public comment period on its new proposal, starting as soon as it is published in the Federal Register.
EDF and Columbia Law School’s Sabin Center for Climate Change Law have created a new website to track implementation of the IRA’s climate change-related provisions. IRAtracker.org is a free resource that includes a searchable database of the Inflation Reduction Act’s climate change-related provisions and a tracker that records actions taken by federal agencies to implement those provisions.
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One of the world’s leading international nonprofit organizations, Environmental Defense Fund (edf.org) creates transformational solutions to the most serious environmental problems. To do so, EDF links science, economics, law, and innovative private-sector partnerships. With more than 3 million members and offices in the United States, China, Mexico, Indonesia and the European Union, EDF’s scientists, economists, attorneys and policy experts are working in 28 countries to turn our solutions into action. Connect with us on Twitter @EnvDefenseFund