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US Electric Vehicle Buyers Score Big: $1 Billion Saved Thanks to New Tax Credits

Daniel Kim Views  

It was found that electric vehicle buyers in the US have saved more than $1 billion through the Inflation Reduction Act (IRA) this year.

Treasury Secretary Janet Yellen said on June 12, “President Biden’s Inflation Reduction Act is lowering costs for electric vehicle purchases, with more than $1 billion in upfront savings for American consumers since January. This discount increases consumer choices and creates new opportunities for companies to expand their customer base.”

According to the US Treasury Department, starting January 1, 2024, more than 150,000 electric vehicles received tax credits at purchase. Of these, more than 125,000 were new electric vehicles, and the rest were used electric vehicles.

The US government provides subsidies of up to $7,500 in the form of tax credits for electric vehicles finally assembled in North America under IRA. Buyers of used electric vehicles can receive up to $4,000.

The US government initially required customers to receive a tax credit at the end of the year after purchasing a vehicle. Still, starting in 2024, they changed the system to allow customers to receive a discount equal to the tax credit amount in advance when purchasing a car. This structure enables consumers to pass the subsidy benefit on to the car dealer and receive a corresponding discount in advance. It was found that the overwhelming majority prefer this.

The US Treasury Department explained that 90% of all new and 80% of used electric vehicle purchases chose to receive a direct discount at purchase instead of receiving a tax credit later.

The US Treasury Department announced that 1.5 million eco-friendly vehicles, including electric and hybrid cars, were sold in 2023, the highest annual number since 2022. This was a 50% increase compared to 2022. Deputy Secretary of the Treasury Department Wally Adeyemo emphasized in a briefing that the Inflation Reduction Act (IRA) is effectively working and has been a game-changer for American consumers and auto manufacturers.

Daniel Kim
content@viewusglobal.com

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