If it seems like you’re seeing more Teslas and other electric vehicles on the road, you’re not going crazy. The adoption of electric vehicles has been steadily on the rise for years. According to the consultancy AutoForecast Solutions, EVs may account for one-third of the North American market and 26% of vehicles produced worldwide by 2029. For a long time, high prices prevented mass adoption. But as the market matures, we are seeing a lot of incentives to purchase electric vehicles. In this blog we’ll talk through the state of electric vehicle manufacturing, the infrastructure, when ownership makes sense and incentives for electric vehicles.
As demand for electric vehicles continues to climb, manufacturers across the world have demonstrated a commitment to meeting that demand with aggressive manufacturing timelines. We’ll see some high-profile roll-outs next year, with electric versions of the Chevrolet Silverado and Mercedes-Benz EQE SUV slated to hit sales floors. Even DeLorean is getting into the game with a 2024 EV launch. All of this comes at the same time that the federal government in the US is putting its weight behind EV adoption, with the government planning to end the purchase of gas-powered cars by 2035.
As we detailed recently in this space there are some tailwinds behind the growth of the infrastructure needed to support EV adoption at scale. The Biden administration has committed to the creation of half a million charging stations by 2030, and they are providing states with billions of dollars to establish their own network of electric vehicle chargers. With money allocated for the development and support of state charging networks, the expected result is a fully functioning national EV charging network before the end of the decade.
There is no question that legislation and market forces are making it a more attractive time for to purchase an electric vehicle. However, that doesn’t mean you should be blindly following the recommendations. There are a slew of factors that you need to take into account, including your location, the resources and infrastructure that currently exist in your area and the lifestyle you intend to live in order to support such a decision. For example, if you plan to use the vehicle primarily to drive around town or commute to a close location, you’re probably more suited for the EV life than someone who wants to take long road trips.
From vehicle manufacturers to state and federal officials, there are a lot of interested parties putting skin in the game to convert individuals and businesses from gas guzzlers to EV operators. It’s easy to get lost in the sea of state and federal tax credits and rebates, charging rebates, local utility incentive programs and other special driving perks for going electric. We will try to help you cut through the noise and identify the most fruitful rebates and incentives.
On the national side, the biggest news to hit the industry was the Inflation Reduction Act, passed earlier this year. The headline here was the extension of a $7,500 EV tax credit, which will now go through December 2032. Not every EV will qualify, as the calculation will take into account factors such as the EV’s sourcing and assembly. And if you already purchased an EV and are worried about missing out, you may still be in luck: used EVs may qualify for a separate tax credit, which covers either $4,000 or 30% of the vehicle price, whichever is less.
These national credits are also restricted based on price. If you’re shopping at the high end of the market, you may not be covered. For cars, any EV with an MSRP over $55,000 will not be covered, while that limit goes up to $80,000 for vans, pickup trucks and SUVs. You can read more about the national EV incentive landscape here.
States are also taking different approaches to EV incentives. You can read about state-by-state EV incentives here. States such as Colorado or Connecticut offer tax rebates of up to $5,000 while other states may not be quite as generous.
And then there are the companies. Companies of all sizes and from all different industries are working toward greenhouse gas reduction goals. Did you know that, as part of the Inflation Reduction Act, that $7,500 tax credit could be as much as $40,000 for business owners? Additionally, state and local governments are working just as hard to convince businesses to convert as they are individuals. This takes on a number of different forms, including incentives for all-electric fleets and the Alternative Fuel Infrastructure Tax Credit, which covers 30% of the cost for businesses installing EV charging stations.
Momentum is a hard thing to change. After years of businesses and consumers dragging feet when it comes to electric vehicle adoption, we are starting to see the tide turn. It may be months away – or more likely years away – but electric vehicles are taking off and gaining popularity as production increases. Interested in staying in the loop on cutting edge trends happening in the vehicle, device and reimbursement spaces? Check out our other posts on technology.