The Inflation Reduction Act, which passed the Senate this weekend, expands federal tax credits for electric vehicles. The bill removes a cap that prevents owners of popular electric vehicle manufacturers, such as Tesla and General Motors, from receiving the credit. It also expands the credit to used electric vehicles.
More than 7 million fully-electric or hybrid vehicles were registered in the US in 2021, according to data from the Department of Energy. Electric cars make up less than 4% of total passenger cars in the US. The federal government and some states provide tax incentives to individuals who purchase electric vehicles. These tax credits can add up to more than $10,000 in some states.
