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What is the impact of Inflation Reduction Act on the electric car sales in the US?

A. Shull

Mar 18, 2023

Inflation is a key economic indicator that plays an important role in assessing the health of the overall economy

What is the impact of Inflation Reduction Act on the electric car sales in the US?

Inflation is a key economic indicator that plays an important role in assessing the health of the overall economy.

In the US, inflation has been on the rise since the late 1990s and has led to increased consumer costs, decreased purchasing power, and higher levels of debt. The US Federal Reserve has taken a number of measures to try to reduce inflation, including raising interest rates, introducing quantitative easing, and increasing the money supply. While inflation has been a major factor in the US economy, the recent passage of the Inflation Reduction Act has had a significant impact on the electric car sales in the US. In this article, we will explore the impact of inflation reduction on electric car sales in the US.The Inflation Reduction Act (IRA) of 2022 will put sales of electric vehicles (EVs) into high gear for customers in the United States, across the board for all sorts of vehicles.

The $370 billion that is being allocated to climate and clean energy investments will significantly increase tax credits and incentives to deploy more clean vehicles, including commercial vehicles, while also supporting a domestic electric vehicle supply chain and the buildout of charging infrastructure.By merging consumer and production regulations, the provisions of the IRA pertaining to the transportation sector will hasten the transition to zero-emission vehicles (ZEVs).

The introduction of consumer tax credits for electric vehicles (EVs), both new and used, as well as tax credits for business EVs, together with tax credits for charging infrastructure, will lead to an increase in sales. The production of electric vehicles and batteries will benefit from investments and incentives offered by domestic supplier chains. Incentives pertaining to the mining and processing of essential minerals will help propel industrial development. These investments come at a crucial moment as the United States works toward a more environmentally friendly future for transportation.

They will contribute to the reduction of the 23 percent of total U.S. greenhouse gas (GHG) emissions that are caused by road transportation. The sections of the IRA pertaining to clean transportation will hasten the process of reaching the EV and climate targets set by the Biden administration. It is anticipated that the United States Environmental Protection Agency (EPA) would publish proposed rulemakings for GHG requirements for both light-duty vehicles (LDVs) and heavy-duty vehicles (HDVs) in the year 2023.

These rules may be able to build upon the work made by the IRA. The data from the US Department of Commerce and the US Department of Transportation can be used to create effective marketing strategies for electric car sales. By analyzing the data, manufacturers can gain insights into consumer preferences and government policies, which can help them create strategies to promote their electric cars. For example, manufacturers can use data on consumer preferences to create attractive designs and features for their electric cars.

Additionally, manufacturers can use data on government policies to create incentives for consumers, such as tax breaks and subsidies. Finally, manufacturers can use data on the availability of charging infrastructure to create strategies to promote their electric cars, such as partnering with governments and private companies to install charging stations.In order to analyze the impact of inflation reduction on electric car sales in the US,

it is important to look at the data. The Inflation Reduction Act had and will have been having a significant impact on the US electric car market as electric car technology advances and charging infrastructure becomes more widely available, it is likely that electric car sales in the US will continue to increase in the future.Ecocar Motors Inc.

"EV sales should grow to reach approximately 29.5% of all new car sales in 2030 from an expect roughly 3.4% in 2021.This would also see sales increase to 4.7 million from a little more than 500,000 in 2021."

Adding up the annual sales beginning from 2010 gets us to approximately 26.2 million cumulative electric vehicles sold, but factoring in an increasing rate of EVs going out of operation each year, we arrive at ~25.19 million EVs in operation. This is an increase of 14X from the roughly 1.8 million at the end of 2020. 

When looking at the state of California, our 2030 forecast for just BEVs (not including PHEVs) shows BEVs as a share of new vehicle sales reaching nearly 57%.

When will electric vehicles cross the chasm into the mainstream in the us? 6.6.19 from EVAdoption

Creating forecasts of when mass adoption will occur is a fun exercise, but no one can say with any real confidence that their prediction is likely to be spot on. There are a couple of dozen variables (gas and battery prices, regulations, battery range, charger speed and availability, supply of new EV models, etc.) that can either speed up or slow down EV adoption.EVAdoption has joined the fray of forecasting future electric vehicle sales, but with specific scope and definitions:We are defining mass adoption as EVs comprising 16% of new auto sales within a specific geographic market.At least for the near term, we are focusing only on two markets: The US and California.

Assumptions:US auto sales: Auto analysts and economists do not agree on future US auto sales, but for our forecast, we are assuming that auto sales will see a modest decline over the next several years do to a slowing economy, changing purchase behavior including consumers holding onto cars longer and forgoing second and third cars by sharing and use of ride-sharing services.California auto sales:

We are assuming that unlike the US overall, auto sales in California will remain relatively flat over the next several years. This is based on California’s continued strong economy and high-tech employment and Californian’s love of driving nice cars.New EV model introductions: We expect the introduction of a significant number of “affordable” EVs in the 2020-2022 time frame.Median battery range: Luxury car battery range will easily average 250-300 miles by 2020, the key will be the availability of affordable SUVs and crossovers with 250 miles of range.Charging speed: DC fast charging time to 80% battery level is reduced to about 15-20 minutes by around 2022.

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