The US economy has already benefited from the Inflation Reduction Act, also known as the Climate Bill, formally signed into law by President Biden just two weeks ago, according to Electrek.
In response, it is anticipated that the climate bill’s new tax credits will significantly increase electric vehicle demands and encourage global manufacturers to source and assemble EV components in the US.
Consumers now have more convenient access to clean, sustainable energy sources due to the climate bill’s new tax credits. In fact, the new tax credits offer up to $7,500 for new EVs and $4,000 for second hands, considering that they passed the eligibility requirements.
The new tax credit mandates that EVs be produced in North America and that their source battery components originate either in North America or from its free trade partners. Aside from this, the models must also go through final testing in North America.
This newly passed bill is a part of the US government’s initiatives to bring manufacturing back to the US and eventually stimulate the economy. Impressively, it was able to give significant results just two weeks after its signing. It is interesting to think how far this bill can benefit the United States.
Electrek listed a few of the biggest updates on the EV automakers since President Biden signed the Inflation Reduction Act:
· Hyundai, which had already announced its intention to produce EVs in the US, is reportedly contemplating about ramping up the construction of its Georgia-based EV plant from 2023 to later this year.
· Volkswagen and Mercedes-Benz forged deals to get EV battery raw materials from Canada in the presence of Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz.
· 10,000 tons of lithium will be purchased from the Canadian mining company Rock Tech, as per Mercedes-Benz.
· Honda and LG Power are developing a joint venture. A brand-new US battery facility with a 40 GWh yearly capacity receives $4.4 billion from the JV.
Notably, these recent developments from the mentioned automotive companies are just the start as this newly passed bill has just been in effect for only 2 weeks.
By 2030, President Biden intends to see 50% of all new cars sold in the US be electric vehicles. However, the government and automakers will need to invest and exert extra effort to get there.
