“”The slow rollout…primarily boils down to the difficulties state agencies and charging companies face in meeting a complex set of contracting requirements and minimum operating standards for the federally-funded chargers, according to interviews with state and EV industry officials,” the article notes.
Even with federal funds, part of the problem may also be cost, because the chargers are quite expensive to build and maintain. The types of chargers mentioned in the law are either Level 2 or Level 3, also known as Direct Current Fast Charging (DCFC). Level 2 chargers use alternating current electricity and take between four and 10 hours to charge an E.V., while DCFCs use direct current and can charge an E.V. in less than an hour.
Any long-term solution would prioritize DCFCs—no road-tripper will want to wait all day for their car to charge when fueling up a gas burner takes minutes. But DCFCs are considerably more expensive to install: A 2019 study by the Department of Energy found that while Level 2 chargers can cost up to $6,500 to install, DCFCs can cost as much as $40,000. Depending on factors like hardware costs, other estimates have put the price between $50,000 and $100,000.”
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” Ultimately, consumer choices will dictate the future of electric vehicles; if people don’t buy them at their current price and with the current technology, then companies will either innovate or come up with something better. By merely subsidizing the current thing, the Biden administration is upholding the status quo and disincentivizing other innovations that could revolutionize the industry and make environmentally-friendly vehicles truly competitive with their gas-burning counterparts.”
“Much of the banter surrounding the rise of China’s electric vehicle (E.V.) industry and the implication for the global economy is misleadingly alarmist. When our government gets involved in such narratives, it calls into question the sincerity of its insistence that E.V.s are essential to an existential battle against climate change. If China’s foray succeeds, the world gets cleaner cars and non-Chinese automakers are obliged to improve their own products.”
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“any related national security concerns are often rooted in misconceptions about the technologies themselves. It’s important to differentiate between civilian and military technologies. E.V. manufacturing primarily involves civilian tech that’s unlikely to have significant national security implications.”
“To qualify for a credit, an E.V.’s “final assembly” must occur in North America. If that sounds complicated for a consumer to figure out, the Department of Energy recommends searching individual cars by Vehicle Identification Number (VIN) “to identify a vehicle’s build plant and country of manufacture.” Past that, at least 40 percent of the battery’s minerals and 50 percent of its components must be sourced either from the U.S. or a country with which it has a “free trade agreement.” Those numbers will go up each year until they reach 80 percent and 100 percent, respectively. Meeting only one percentage requirement and not the other qualifies for half of the credit ($3,750).
The rules were written to exclude China. But China owns or controls the overwhelming majority of materials used in E.V. batteries. Not to mention, the European Union also lacks a free trade agreement with the United States. According to the Energy Department, only 14 vehicle models qualify for the full credit: five from Chevrolet, four from Tesla, two from Ford, and one each from Cadillac, Chrysler, and Lincoln. Some others qualify for half-credits due to sourcing requirements—for example, Ford manufactures the Mustang Mach-E’s battery in Poland—but American companies noticeably account for every single qualifying vehicle.
That’s a great deal for those four companies—Ford, General Motors, Stellantis, and Tesla—but a bad deal for everybody else. Numerous foreign automakers sell E.V.s in the U.S. but are disqualified from tax credits unless they build the vehicles domestically using parts sourced in a very specific way. Meanwhile, two versions of the Chevrolet Bolt—which uses outdated battery technology and was briefly taken off the market in 2021 when its batteries were catching on fire—qualify for the full tax credit under the new rules. So even though a consumer might find the similarly priced Nissan Leaf to be more reliable, a $7,500 tax credit might sway them away from it. That would be a boon to Chevrolet’s bottom line as it still gets to charge full price for the car, and the U.S. government will reimburse the purchaser at tax time.”
“EV fires are relatively rare. Smith said his department has seen just a handful of EV fires. While the US government doesn’t track the number of EV fires, specifically, Tesla’s reported numbers are far lower than the rate for highway fires overall, the National Fire Protection Association (NFPA) told Vox. The overwhelming majority of car fires are caused by traditional internal combustion vehicles. (This makes sense, in part because these vehicles carry highly flammable liquids like gasoline in their tanks, and, as their name implies, their engines work by igniting that fuel.)”
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“Although they’re relatively rare, electric car fires present a new technical and safety challenge for fire departments. These fires burn at much higher temperatures and require a lot more water to fight than conventional car fires. There also isn’t an established consensus on the best firefighting strategies for EVs, experts told Vox. Instead, there’s a hodgepodge of guidance shared among fire departments, associations that advise firefighters, and automakers. As many as half of the 1.2 million firefighters in the US might not be currently trained to combat EV fires, according to the NFPA.”
“Since 2010, a U.S. taxpayer purchasing an electric car could claim a nonrefundable tax credit of up to $7,500. However, only 200,000 credits could be claimed per automaker. Tesla, General Motors, and Toyota have all reached the limit.
The IRA removes the manufacturer cap and introduces a new credit of up to $4,000 toward a used EV, which could help anybody who can’t or doesn’t want to buy brand new. But the law also established several prerequisites that a vehicle must meet to qualify.
Since August, vehicles have been subject to a “final assembly” requirement, which says the car’s final assembly must have occurred in North America. That single restriction is complicated, as you can see from the Department of Energy’s list of eligible vehicles. The agency recommends that shoppers research cars by Vehicle Identification Number (VIN) to determine eligibility. Those requirements carry over into 2023.
Starting January 1, individuals earning over $150,000 per year or households earning over $300,000 will no longer qualify for the EV tax credit. Electric cars that retail for more than $55,000, and electric trucks and SUVs over $80,000, are also not eligible. According to Kelley Blue Book, the average price for an EV is over $65,000.
Under the IRA, the credit also depends on the materials used to assemble a vehicle’s batteries. Certain minerals—chiefly lithium, cobalt, manganese, nickel, and graphite—are essential to constructing the lithium-ion batteries used in electric vehicles. Starting in 2023, qualifying for half of the $7,500 credit requires that 40 percent of the minerals used to assemble an E.V.’s battery be sourced from the U.S. or a country with which it has a free-trade agreement. To qualify for the other half, 50 percent of the battery’s parts must be sourced domestically or from a free-trade partner. Each of these percentages will increase over subsequent years.
In December, the Treasury Department suspended the mineral requirement until March, when it can issue final rules. But notably, the law requires that starting in 2024, no battery parts can be sourced from a “foreign entity of concern,” such as Russia or China. The same requirement applies to minerals the following year.”
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“The E.V. tax credit is a convoluted mess. Because of the Treasury delay, most automakers will likely be able to offer half of the credit for two months. Then for the rest of the year, only certain models will qualify, forcing customers to check each individual car or truck to see. Finally, next year, fewer and fewer vehicles will qualify at all, as the U.S. is unable to source necessary materials from politically-favored places. Perplexingly, Treasury announced in late December that leases would be exempt from all sourcing and assembly requirements and eligible for the full $7,500 credit.”
“Much of the European ire is directed at an IRA requirement that electric vehicles must have their final assembly in North America to qualify for a $7,500 tax credit. That has eliminated many European models that previously qualified, and even more could be excluded when additional domestic content provisions take effect, beginning in January.
The Treasury Department is currently developing guidance for how it will implement that tax provision, and Biden referred specifically to language that provides better treatment for countries that have a free trade agreement with the United States as one area where the law could be implemented in a flexible manner.
“That was added by a member of the United States Congress who acknowledges that he just meant allies. He didn’t mean literally free trade agreement. So there’s a lot we can work out,” Biden said.
That would solve some of the EU’s problems, since it doesn’t have a free trade pact with the United States. However, there is still the bigger problem that many of the cars that European companies sell in the United States are assembled in Europe, disqualifying them for credit because of the North American assembly requirement.
Biden did not say how that could be addressed, but U.S. lawmakers in recent days have said the administration is considering giving automakers more time to comply with the IRA provisions. That’s an issue that the France and other EU member states will continue to discuss with the United States through a recently established bilateral task force.”