The U.S. Treasury Department announced on Tuesday that over $2 billion in consumer electric vehicle (EV) tax credit payments have been issued since January 1, covering more than 300,000 vehicles. This comes as part of a new initiative allowing consumers to receive tax credits directly at the point of sale, significantly reducing the upfront cost of EVs.
The credits, introduced under the 2022 Inflation Reduction Act, offer up to $7,500 for new electric vehicles and up to $4,000 for used models. “These savings are giving consumers new choices and helping automakers and dealers to attract new customers and grow their businesses,” said Treasury Secretary Janet Yellen.
Since the program’s inception, more than 250,000 credits have been issued for new EVs, while around 50,000 credits have been applied to used models. The tax credit is transferred to car dealers at the time of purchase, effectively reducing the vehicle’s price for the consumer.
The Treasury Department’s Office of Economic Policy also released a new analysis estimating that electric vehicle owners could save between $18,000 and $24,000 over the vehicle’s 15-year lifespan compared to owners of gasoline-powered vehicles. “Consumers will save an average of $21,000 on fuel and maintenance over the lifetime of their vehicles and be protected from the volatility of gasoline prices,” added Yellen.
The Inflation Reduction Act also imposed new guidelines to steer the EV and battery supply chain away from China. This includes requiring that EVs be assembled in North America to qualify for the tax credits, alongside income and vehicle price restrictions.
