In line with President Biden’s Investing in America Agenda, the White House has announced the first set of public and private commitments to support America’s transition to electric vehicles (EV) under the EV Acceleration Challenge. The goal is to have 50% of all new vehicle sales electric by 2030. The incentives aim to lower the cost of EVs and charging infrastructure, increase consumer demand and competition, promote equity and inclusion, and accelerate the growth of the EV market.
Federal Agencies Leading by Example with Zero Emission Vehicles
Federal agencies are already leading by example as they have acquired 13,000 light and medium-duty zero emission vehicles (ZEV) in Fiscal Year 2023, four times the number acquired in Fiscal Year 2022. The agencies have a plan to acquire 100% light-duty ZEVs annually by 2027 and 100% medium- and heavy-duty ZEVs annually by 2035. These actions not only uphold the government’s commitment to reduce emissions but also set an example for private entities.
Private Sector Driving Transition Towards Electric Vehicles
Several companies and nonprofits, including Prologis, First Student, Hertz, Amazon, Google, Rewiring America, and others have committed publicly to expanding EV fleets, increasing consumer education and growing the availability of EV charging. Amazon is investing in rolling out over 3,000 electric delivery vehicles soon and is committed to bringing 100,000 electric delivery vehicles on road by 2030. Hertz is committing to increasing its electric vehicle rentals this year substantially and forecasts nearly two million EV rentals in 2023. Google will provide up-to-date information about availability and coverage of tax credits across eligible passenger vehicles with a new search tool. Rewiring America plans to launch an online personal electrification planner in 2023 with the goal of assisting 100,000 homeowners and renters to create roadmaps to electrify their homes and choose electric vehicles.
Categories of Commitments
The announcements from these companies fall into four categories: Consumer Education and Support, Tools and Resources, EV Fleet Expansion, and Community Charging: Commercial and Multifamily. Several announced new EV-related initiatives like online personal electrification planners, cross-country campaigns, EV marketing events, EV information and shopping tools.
U.S. Treasury Department’s guidance on battery sourcing requirements for electric vehicle tax credits
While the recent announcement focuses on incentivizing transition to electric vehicles, the U.S. Treasury Department will issue guidance about battery sourcing requirements for electric vehicle tax credits. It is said that the guidance must answer complex questions related to how minerals and components should be classified. The new guidelines require 50% of the value of battery parts produced or assembled in North America to qualify for $3,750 of credit while 40% of critical minerals must be sourced from the United States or a country with which it has a free trade agreement. Those percentages are expected to rise by 10 annually for compliance eligibility.
Treasury Department said in December that it would define key terms like processing, extraction, recycling and what constitutes a free trade deal. Electric vehicles must be assembled in North America to qualify for any credit. Some EVs not meeting new requirements have some months of eligibility left in 2023 before the rules take effect.
The main aim behind these rules is to liberate The United States off dependence on China which dominates the global supply chains of products like EV batteries and solar panels. President Biden believes that over time these tax credits will result in more EVs sold as automakers revamp supply chains to meet critical mineral and component rules.
Conclusion
In conclusion, the Biden Administration’s EV Acceleration Challenge aims to bring a clean, safe, affordable, and reliable transportation future to Americans even faster. With the help of both private entities and public institutions, America is on its way to achieving a greener future. However, with proper guidance from the U.S. Treasury Department, automakers and companies will be able to work it out and provide more EVs in the market.
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