Americans have now claimed over $1 billion in new EV purchase credits and other subsidies under the Inflation Reduction Act, as announced by the U.S. Treasury Department. This significant milestone, achieved since the program’s implementation in January, has seen more than 150,000 total payments distributed, with the majority being advance tax credits for new electrified vehicles.
“The Inflation Reduction Act, spearheaded by President Biden, has successfully reduced costs for electric vehicle purchases, offering American consumers more than $1 billion in upfront savings since its inception. These discounts not only expand consumer choices but also present new opportunities for companies to grow their customer base,” stated Secretary of the Treasury, Janet L. Yellen. “Consumers can enjoy immediate savings as well as long-term benefits, with potential savings of $1,750 on gas and maintenance annually, and up to $21,000 over the vehicle’s lifetime.”
While the long-term savings may resemble a sales pitch from Tesla, the administration provided data to substantiate their claims. Treasury’s Office of Economic Policy, in collaboration with Energy Innovation Policy & Technology, estimates that owners of electric vehicles can save between $18,000 to $24,000 over a 15-year period compared to purchasing a comparable gasoline vehicle. The primary contributor to these savings is lower fuel costs, with electric vehicles typically offering substantially lower fuel expenses per mile compared to gasoline vehicles.
Furthermore, according to the analysis, maintenance costs for EVs are approximately 40% lower than those for internal combustion engine (ICE) equivalents. The Inflation Reduction Act prioritizes electric and plug-in hybrid vehicles made in the USA, although recent adjustments have been made to EV battery sourcing restrictions, potentially widening the pool of eligible vehicles for credits in upcoming model years as the process is refined.
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