You are currently viewing E.V. Tax Credits Are a Plus, but Flaws Remain, Study Finds

The Inflation Reduction Act was a compromise between competing priorities. Evaluating the law on the effectiveness of the $7,500 tax credit for E.V.s is tricky.

A team of economists has taken on a central component of the Inflation Reduction Act: the $7,500 tax credit for U.S.-made electric vehicles.

The challenge in evaluating it is that the policy has sometimes conflicting goals. One is getting people to buy electric vehicles to lower carbon emissions and slow climate change. The other is strengthening U.S. auto manufacturing by denying subsidies to foreign companies, even for better or cheaper electric vehicles.

That’s why totaling those pluses and minuses is complex, but overall the researchers found that Americans have seen a two-to-one return on their investment in the new electric vehicle subsidies. That includes environmental benefits, but mostly reflects a shift of profits to the United States. Before the climate law, tax credits were mainly used to buy

Keep reading this article on The New York Times Energy & Environment.

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