The Surprising Limits Of America’s EV Tax Credits

The party’s over. Now comes the hangover. 

I’m talking about the end of electric-vehicle tax credits in America, which helped drive a bonanza of sales in the third quarter of this year. But now that they’re gone, many experts and analysts expect a downturn in the market—at least for a while. Predictions we’ve reported on range from “a speed bump” to “a dangerous drop in investments that would keep the U.S. competitive with Europe and China.”

How did we get here, and what happens next? That’s the big story on this week’s Plugged-In Podcast. 

To learn more, my co-host Tim Levin and I spoke to Elaine Buckberg, who is a Senior Fellow at Harvard University’s Salata Institute for Climate and Sustainability. She’s also the former Chief Economist of General Motors and a former senior U.S. Treasury official, so she’s well-versed in the entire EV tax credit system, why it happened, where it was successful—and where it fell short.

One thing she cited as a miss for the credit: the leasing loophole, which was primarily designed to get corporate fleets into EVs but ultimately led more than 1 million people (including me, for transparency’s sake) to net super-cheap lease deals. Why was that a bad thing? 

“It undermined EV purchasing,” Buckberg told us. “Put income caps, put price caps on the tax credit instead. Why should we subsidize someone who’s going to make the purchase anyway? We’re trying to catalyze marginal purchases. If you ask me what to do to make the policy cheaper, I would have closed the lease loophole and not eliminated the credit.”

Tune in for a thoughtful discussion about what happened here, and what comes next.

We’re also discussing what we’ve learned about the new Porsche Cayenne Electric, which isn’t just a bigger Macan Electric but represents groundbreaking techniques in battery packaging—and a very slick curved screen to boot. Plus, we cover what you need to know about EV deals in a post-tax credit world.

Our show drops every Friday and is available on Spotify, Apple Music, YouTube and wherever you listen to podcasts. And let us know: Who else do you want to see interviewed on the show? What questions can we answer about the EV world? We love to hear from you, so hit us up.