American Car Buyers Receive Over $1 Billion in Federal Incentives for Electric Vehicles

Treasury Department Announces Over $1 Billion in EV Purchase Credits through Inflation Control Act

The U.S. Treasury Department announced on Wednesday morning that Americans have claimed more than $1 billion in new electric vehicle (EV) purchase credits and other point-of-sale subsidies under the Inflation Control Act (IRA). This significant milestone highlights the program’s success since it took effect in January, with over 150,000 total payments, including more than 125,000 upfront tax credits for new electric vehicles.

"President Biden’s Inflation Control Act is lowering the cost of buying an electric vehicle, saving American consumers more than $1 billion in upfront costs since January," said Treasury Secretary Janet L. Yellen. "These discounts increase consumer choice and create new opportunities for businesses to expand their customer base. Consumers save upfront and over the long term, with annual savings of $1,750 on gas and maintenance, and $21,000 over the vehicle’s lifespan."

The Treasury Department provided data to support these savings claims, outlining a comprehensive analysis conducted by the Office of Economic Policy. The analysis indicates that, when considering expected annual savings over a 15-year lifespan, EV owners could save between $18,000 and $24,000 compared to owning a comparable gasoline-powered vehicle. Fuel costs are the primary driver of these savings, with electric vehicles typically benefiting from significantly lower fuel costs per mile despite regional variations in gasoline and electricity prices.

Maintenance costs also favor EVs, being approximately 40% lower than internal combustion engine (ICE) vehicles. This difference contributes further to the long-term financial benefits for consumers choosing electric vehicles.

To promote domestic manufacturing, the IRA is designed to favor electric and plug-in hybrid vehicles made in the United States. However, recent adjustments to EV battery procurement regulations by the administration aim to broaden eligibility for credits, ensuring more vehicles can qualify in upcoming model years.

In summary, the Inflation Control Act has made a substantial impact on the adoption of electric vehicles in the U.S., providing significant financial incentives for consumers and supporting the transition towards more sustainable transportation. With more changes on the horizon, the program is well-positioned to continue driving growth in the EV market.