America’s going green: federal EV charger tax credit

December 1, 2021 5:47 pm

President Joe Biden has decided to encourage the manufacture and use of electric vehicles contributing to greater care of the environment. With a zero-emission goal, the Democratic Party proposed a federal EV charger tax credit to help more people choose electric vehicles, businesses to become charging points and automotive makers to go electric too. 

This new federal EV charger tax credit includes different incentives both for drivers and producers of electric vehicles, which seeks to encourage and accelerate the switch from conventional vehicles to electric. Tax credit payout will be higher or lower depending on different variables. We’ll elaborate on this in a few paragraphs.

Federal incentive programs

The federal EV tax credit replaces the old “clean energy plan” that sought to punish those who chose not to choose non-gas-powered forms of mobility. Instead, the US federal EV tax credit programs seek to encourage more people and manufacturers to switch to EVs by giving them tax breaks. Each state has its economic incentives for electric vehicles. 

It is intended to encourage automotive manufacturers to produce more electric vehicles of all types, as well as inspire more business owners to be part of this change by offering the service of being a recharging point. 

In this way, it is more likely that more drivers will choose to buy an electric vehicle instead of a regular one. All this will bring down the price of EVs, making even more people adopt this new form of mobility that uses renewable energy.

These moves are critical to demonstrate America’s commitment to reducing the greenhouse gases that cause the well-known and dreaded global warming. As a result, drivers who wish to purchase an electric vehicle will get up to $12,500 in tax credits. The amount will depend on how many parts of the EV were manufactured in America and whether the vehicle was built by union workers.

Details on the GREEN Act

As said, drivers who choose to buy an EV instead of a gas-fueled vehicle will be eligible to receive up to $12,500 in tax credits. Currently, there’s a $7500 tax credit for EVs, but the GREEN Act adds $500 for electric vehicles built with batteries made in the US and $4500 more for those built by union workers. 

It was Congressman Thompson who confirmed that this bill incentivizes the use of renewable energy through tax incentives “that will promote clean energy technologies and faster deploy zero-emissions vehicles.”

The goal is to increase EVs sales in the next few years. When 200,000 electric vehicles are finally sold, the tax credit will reduce to $7,000 for those drivers who choose to switch from fossil-fueled to electric. 

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