IRA GIVES BOOST TO CLEAN CARS
The federal Inflation Reduction Act (IRA) became law on August 16, 2022. It provides a major boost to electric vehicles and to the clean electricity that will power them. It’s further evidence that our leaders understand that moving beyond gasoline is key to meeting our environmental challenges and improving Americans’ quality of life.
An important component of the IRA is the extension of tax credits for EV purchases. The IRA’s $7,500 tax credit for new EV purchases and $4,000 for used EV purchases should cover 10-20% of the EV purchase price, assuming the full credit can be applied. Given that the sticker price of an EV is expected to be roughly the same as an equivalent gas car within the next 1-3 years, the IRA will confer a significant, ongoing cost advantage for the purchase of EVs, and will advance the goal that all new vehicles be electric by 2030.
While the IRA is a major step forward, it will still likely fall short of achieving the Biden Administration’s goal of cutting greenhouse gas emissions from all sectors in half by 2030, per analysis by Energy Innovation. The transportation sector is the biggest source of those emissions; policies that focus on cutting gasoline use are indispensable to reaching the goal.
One way to cut gasoline use faster is to switch the biggest gasoline users (“Gasoline Superusers”) to EVs first. Switching a Superuser to an EV can displace four times as much gasoline as switching an average driver. Yet currently, Superusers are on track to be the last to swap out their gas-powered vehicles for EVs.
Moreover, Coltura’s research shows that Superusers are often below the median household income; they are the families suffering the most from the financial burdens of buying gasoline. Superusers need support to move to the front of the line for EVs if we are to meet our climate and equity goals.
Coltura advocates for reforming federal and state EV incentives to prioritize getting Superusers into EVs. For more on Coltura’s research on Gasoline Superusers and the push for EV incentive reform, please visit coltura.org/gasoline-superusers.
