The Surprising Limits Of America's EV Tax Credits

"The party's over. Now comes the hangover. I'm talking about the end of electric-vehicle tax credits in America, which helped drive a bonanza of sales in the third quarter of this year. But now that they're gone, many experts and analysts expect a downturn in the marketat least for a while. Predictions we've reported on range from "a speed bump" to "a dangerous drop in investments that would keep the U.S. competitive with Europe and China.""

"To learn more, my co-host Tim Levin and I spoke to Elaine Buckberg, who is a Senior Fellow at Harvard University's Salata Institute for Climate and Sustainability. She's also the former Chief Economist of General Motors and a former senior U.S. Treasury official, so she's well-versed in the entire EV tax credit system, why it happened, where it was successfuland where it fell short."

""It undermined EV purchasing," Buckberg told us. "Put income caps, put price caps on the tax credit instead. Why should we subsidize someone who's going to make the purchase anyway? We're trying to catalyze marginal purchases. If you ask me what to do to make the policy cheaper, I would have closed the lease loophole and not eliminated the credit.""

The expiration of U.S. electric-vehicle tax credits followed a Q3 sales bonanza and now threatens a market downturn. Forecasts range from a temporary speed bump to a dangerous decline in investments that could weaken U.S. competitiveness with Europe and China. A leasing loophole designed for corporate fleets produced over one million very cheap consumer lease deals and undermined EV purchasing incentives. Policy adjustments could include income and price caps and closing the lease loophole rather than fully eliminating credits. The Porsche Cayenne Electric introduces novel battery packaging and a curved screen, and consumer deals will shift in a post-credit market.

Read at insideevs.com