The Inflation Reduction Act of 2022 includes roughly $369 billion in new climate, energy and community investments, which represents half of the spending in the bill. Once implemented, it is projected to cut greenhouse gas emissions by up to 40% by 2030. This reduction would bring our nation significantly closer to meeting the 50-52 percent cut in emissions President Biden has pledged to achieve in order to avert climate catastrophe. While some say it is not big enough, we are grateful for the emission reduction potential this bill can achieve, particularly through its focus on electric vehicles.
What is in the bill that Ecology Action is so excited about? The bill includes tax credits for electric vehicles, wind, solar and other renewable energy. There are incentives for residential and commercial investments in energy efficiency. Think solar panels, heat pumps, electric water heaters, etc. to electrify residential homes—critical climate actions for individuals with added financial savings over time.
But for us, who have been working for a decade to transition all our community members to electric vehicles, the bill is a huge step forward to encourage more people to make the switch because of its tax credits. The bill also includes a $7,500 point of sale credit for people who buy new electric vehicles beginning in 2023 and the credit is guaranteed through 2032. For the first time ever, it also offers a $4,000 credit for people who buy used electric cars which tend to be more affordable than a new EV. This is critical to get more Americans in electric vehicles. The length of the credit until 2032 is important because EVs are in short supply, dealers are charging market-ups over MSRP, and new, more affordable EV models are coming to the market. Stay tuned for a more detailed analysis of the intricacies of the new EV benefit, particularly as it relates to stricter requirements (i.e. American made). So, while it may not be the easiest time to buy an EV now, we anticipate the EV market to normalize so more and more people can take advantage of these credits.
We’ve learned through our EVs Para Todos/EVs for Everyone campaign that once people get to experience an EV, they’re likely to never go back to a gas-powered polluting vehicle. This is why it is so important for all community members, no matter their income level, to experience an electric vehicle as transportation electrification is an essential solution to a climate-safe future. To help community members make the switch, our team of EV experts is here to assist through our Free EV Purchase Guidance Assistance Program.