Will an instant tax credit spark more EV sales?

Presented by Chevron: Your guide to the political forces shaping the energy transformation

Oct 06, 2023 View in browser   By Arianna Skibell Presented by Chevron Electric vehicles are displayed while charging. | Drew Angerer/Getty Images The White House has a bit of good news for electric vehicle buyers: You may be eligible for an immediate $7,500 rebate. The Treasury Department released new guidance today outlining how buyers can instantly recoup their federal tax credits instead of waiting until they file their taxes, writes James Bikales. The credits were included in President Joe Biden’s climate law, which allocated $370 billion for clean energy investments. Under the new guidance, starting in January, buyers who opt for a new EV and make less than $150,000 (or $300,000 for married couples) can get a tax credit of up to $7,500 back from the dealer at the time of purchase. For used cars less than $25,000, buyers who make less than $75,000 (or $150,000 for married couples) can receive a credit of as much as $4,000. The vehicles must also meet various other Treasury requirements for buyers to get the tax credit — including restrictions on where new vehicles were assembled and where their batteries’ parts and minerals came from. The Biden administration hopes the move will persuade more people to buy battery-powered cars and trucks amid a tumultuous time for electric models, which the administration is relying on to meet its goal of curbing planet-warming pollution from the transportation sector. The worker strike against Michigan’s Big Three is threatening to undermine U.S. automakers’ efforts to ramp up EV production. A few weeks into the strike, Ford hit pause on building a $3.5 billion EV battery plant in Michigan that would be the first to manufacture next-gen lithium, iron and phosphate batteries on U.S. soil. And conservative politicians on both sides of the Atlantic are ramping up their anti-EV rhetoric, making the battle against electric cars a campaign issue. While a point-of-sale rebate is unlikely to fully address the larger hurdles to EV adoption, it could be key for easing one of consumers’ top concerns: the price tag. A recent George Washington University study found that prospective EV buyers, especially lower-income ones, overwhelmingly preferred an instant rebate over a tax credit.   Thank goodness it's Friday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net. And folks, let’s keep it classy. PROGRAMMING NOTE: We’ll be off this Monday for Indigenous Peoples Day but will be back in your inboxes Tuesday.   A message from Chevron: Chevron knows methane management is critical for a lower carbon future. We’re striving to lead in methane management with innovative practices, partnerships, and new technologies. These are a few ways we’re aiming to keep methane in the pipe.   Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Scott Waldman breaks down how Virginia's elections could affect action on climate change, with Republicans hoping to regain full control of the Legislature and the White House watching closely.   A message from Chevron:   UAW strike update United Auto Workers member Ryan Kosloski holds a picket sign near a General Motors assembly plant in Delta Township, Mich., on Sept. 29. | Paul Sancya/AP Photo United Auto Workers President Shawn Fain announced today that the union would not not expand its strike against the Big Three auto manufacturers for the time being, citing “significant progress” in recent negotiations. Fain said General Motors has agreed "in writing" to place the company's electric vehicle battery production under the union's national contract. But he cautioned the union could reverse course if negotiations hit more speed bumps. “We don’t strike for the hell of it,” he said. “The Big Three know we are not messing around, and they know if they want to avoid more strikes, they will have to pony up.” Power Centers Claudine Hellmuth/POLITICO (graphic); iStock (images) Bigger may not be better As the Biden administration boosts offshore wind to help meet its climate targets, developers are trying to make wind power inexpensive by installing increasingly large and powerful turbines aimed at improving efficiency, writes Minho Kim. But as developers plan for turbines that stand 800 feet — taller than the Golden Gate Bridge — federal officials and experts are warning that the models will take years to produce and could substantially increase costs. Greens join UAW fight A coalition of the nation’s largest climate and environmental groups is launching a campaign to support striking autoworkers — from hitting the picket line to text banking and even canvassing dealerships across the nation that are affiliated with the Big Three, write Hannah Northey and Mike Lee. While environmentalists and labor advocates have a historically rocky relationship, green groups see the UAW strike as critical to fighting climate change. EU backs massive climate target The European Union quietly took a major step toward pledging to cut its greenhouse gas emissions by 90 percent by 2040 this week, write Karl Mathiesen and Zia Weise. Legislative debate on the target is likely to predominate EU deliberations next year. If enacted, the goal would lay down a benchmark for the EU’s peers in the developed world. In Other News 'Gobsmackingly bananas': An extremely warm September has alarmed climate scientists. Explainer: How government neglect and misguided policies doomed Libya to deadly floods.   GROWING IN THE GOLDEN STATE: POLITICO California is growing, reinforcing our role as the indispensable insider source for reporting on politics, policy and power. From the corridors of power in Sacramento and Los Angeles to the players and innovation hubs in Silicon Valley, we're your go-to for navigating the political landscape across the state. Exclusive scoops, essential daily newsletters, unmatched policy reporting and insights — POLITICO California is your key to unlocking Golden State politics. LEARN MORE.     Subscriber Zone A showcase of some of our best subscriber content. Children attempt to cross a flooded area in Pakistan on the back of a satellite dish in August 2022. | Fida Hussain/AFP/Getty Images Extreme weather events and climate disasters displaced more than 43 million children around the globe between 2016 and 2021, according to a new report from UNICEF. A drop in hydropower generation caused global carbon dioxide emissions from the power sector to increase slightly in the first half of 2023, despite a surge in wind and solar. Western efforts to crimp Russian oil revenues have run aground with real prices floating far higher than a theoretical cap imposed by G7+ countries at the end of last year. That's it for today, folks. Thanks for reading, and have a great weekend!   Enter the “room where it happens”, where global power players shape policy and politics, with Power Play. POLITICO’s brand-new podcast will host conversations with the leaders and power players shaping the biggest ideas and driving the global conversations, moderated by award-winning journalist Anne McElvoy. Sign up today to be notified of new episodes – click here.       A message from Chevron: By 2028, our upstream methane intensity target is set to be 53% below the 2016 baseline. To help us get there, we’ve trialed over 13 advanced methane technologies including satellites, planes, drones, and fixed sensors to help reduce methane emissions intensity. In the Permian, we have deployed real-time autonomous optimizers that continuously monitor facilities and well conditions to help prevent flaring, venting and well shutdowns. Developing new solutions to provide energy that’s affordable, reliable and ever-cleaner, that’s energy in progress.     Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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