Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Sparks

Uncle Sam Is Helping Americans Buy 675 Electric Cars a Day

New Treasury data just dropped.

An EV charger.
Heatmap Illustration/Getty Images

Earlier this week, I was thinking to myself, how are we going to know how many people are actually taking advantage of the tax credits in the Inflation Reduction Act?

When I put the question out on Twitter — I mean, X — I heard from Sam Hughes, a researcher inside the Treasury who pointed me to a section of the department’s website that contains data on tax credits by year. The problem is, it hasn’t been updated since 2020. But then today, as if to answer my prayers, I received a taste of the data I was looking for in my inbox.

A Treasury official shared that the IRS has received notices from car sellers indicating they sold more than 25,000 tax credit-eligible vehicles between January 1 and February 6. That’s an average of more than 675 EVs sold at a government-sponsored discount per day.

To put that in perspective, about 1.08 million cars were sold in total in the month of January, according to Cox Automotive, or about 34,840 per day. So the tax credit-supported EVs were only about 2% of the total cars sold.

But 25,000 discounted EVs is nothing to scoff at — especially since starting January 1, two big changes were made to the tax credit that made it both harder and easier for Americans to get them.

First, new rules that limit what countries the components in eligible EVs are allowed to come from had the effect of disqualifying a lot of EVs from the tax credit. As of today, only 22 models from Chevy, Ford, Rivian, Tesla, and Volkswagen qualify, according to the Department of Energy. Last year, there were 35 models.

But at the same time, car buyers were given the option to transfer the tax credit to their dealer at the point of sale. That meant the dealer could take the $7,500 discount for new EVs, or $4,000 for used EVs, directly off the price of the car. Buyers no longer have to worry about whether or not they will owe $7,500 in taxes at the end of the year, or wait around for their tax return, to get that money back.

The Treasury said it has paid approximately $135 million in advance payments to dealers for about 19,000 of the EVs sold this year.

So even with fewer options available, buyers are still taking advantage of the new instant rebate and finding vehicles that work for them. The vast majority of the EVs sold — more than 22,000 — were new cars, while just over 3,000 were used EVs.

One disheartening stat included in the data is that some 11,000 dealerships have registered with the IRS to sell tax credit-eligible vehicles. As of last year, there were just over 16,800 dealerships in the country, according to the National Automobile Dealerships Association, so that means only about 65% of dealerships can offer customers the EV tax credit. Many dealers are not yet on board with the electric revolution. They take longer to sell and require less maintenance, cutting into profits.

The Treasury official said the department was trying to increase registrations via trade association partners, webinars, and conferences.

This smidgeon of data is not enough to assess how well the tax credits are working, and I hope that after tax day, the agency releases similar information about how many people claimed other IRA-related tax credits last year.

Blue

Emily Pontecorvo

Emily is a founding staff writer at Heatmap. Previously she was a staff writer at the nonprofit climate journalism outlet Grist, where she covered all aspects of decarbonization, from clean energy to electrified buildings to carbon dioxide removal. Read More

Read More
Sparks

Biden’s $7 Billion Solar Bonanza

The Solar For All program is the final piece of the $27 billion Greenhouse Gas Reduction Fund.

Solar panel installation.
Heatmap Illustration/Getty Images

The great promise of solar panels — in addition to their being carbon-free — is the democratization of energy. Anyone can produce their own power, typically for less than the going utility rate. The problem is that those who stand to benefit the most from this opportunity haven’t been able to access it.

That pattern could change, however, with Solar for All, a $7 billion program under the Environmental Protection Agency to support solar in low- to moderate-income communities. On Monday, the Biden administration announced it was awarding the funds to 60 state and local governments, tribes, and national and regional nonprofits, at an average grant size of more than $80 million.

Keep reading...Show less
Green
Offshore wind.
Heatmap Illustration/Getty Images

Things are looking down again for New York’s embattled offshore wind industry.

The state is abandoning all three of the offshore wind projects it awarded conditional contracts to last October, after failing to secure final agreements with any of the developers, Politico reported Friday.

Keep reading...Show less
Blue
Sparks

Forever Chemical Enforcement Just Got Even Stronger

In addition to regulating PFAS presence in water, the EPA will now target pollution at the source.

Drinking water and the periodic table.
Heatmap Illustration/Getty Images

Last week, I reported on the Environmental Protection Agency’s monumental new restrictions on “forever chemicals” in Americans’ drinking water. At the time, I stressed that the issue doesn’t end with the water that flows out of our kitchen and bathroom taps — the government also has a responsibility to hold polluters accountable at the source.

On Friday, the EPA did just that, designating perfluorooctanoic acid and perfluorooctanesulfonic acid, a.k.a. PFOA and PFOS, as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act, more commonly known as the Superfund law.

Keep reading...Show less
Yellow