Inflation Act Passes Senate, EV Tax Credit Updated
Aug. 10, 2022—The Inflation Reduction Act has passed the Senate and now moves to the House. Once there, it is expected to move through House within the next week and hit President Biden’s desk.
The bill, which includes nearly $400 billion over 10 years to fund climate and energy initiatives, also includes updates to the U.S. electric car tax credit.
According to Electrek, the bill “could put the U.S. on target to reduce emissions between 31-44% (below 2005 levels) by 2030.” The U.S. target for emissions reductions as cited by president Biden is a 50% reduction by 2030, which is 6-19% short of his goal.
The $7,500 electric vehicle tax credit is expected to start in January 2023 and will last until the end of 2032.
The new credit removed the previous cap of 200,000 cars per manufacturer and allows unlimited credits provided all other requirements are met, including the latest which has automakers up in arms—that cars must be assembled in North America using battery materials from the U.S. or a country with a free trade agreement with the U.S.