EV Tax Credits Seek to Boost Commercial Electric Truck Adoption in U.S.
New electric vehicle (EV) incentives set to go live in the U.S. on January 1, 2023, will seek to boost commercial electric truck adoption and demand in the U.S. by offering tax credits of $7,500 or $40,000, depending on the size of the vehicle, to companies — reports Automotive News.
These commercial incentives, the first of their kind, were established under President Joe Biden’s Inflation Reduction Act (IRA). What’s more, companies can combine federal tax credits with state incentives (such as those offered in California and New York) for even more savings.
According to experts, purchase incentives should help close the price gap between EVs and gas-powered alternatives. They will “help level the playing field for electric vehicles,” said Ben King, associate director at research firm Rhodium Group.
Under the IRA, delivery companies like FedEx and Amazon would qualify for a $7,500 tax credit per vehicle. Amazon has partnered with EV startup Rivian for electric delivery vans in the U.S. and, as of July, is rolling them out nationwide.
“We’re at a tipping point,” said Jim Chen, Rivian’s VP of public policy. In an emailed statement to Reuters, Amazon said it expects the IRA to “transform our collective approach to reducing carbon emissions across sectors.”
Commercial customers like PepsiCo who purchase larger, long-haul EVs such as Tesla’s Semi will be eligible for the full $40,000.
Incentives for commercial EV customers also don’t carry the same “made in the USA” requirements as the rules for passenger cars.
Ford CEO Jim Farley said earlier this year that tax credits offered under the IRA would have a “dramatic impact on the adoption of EVs.” More commercial EV purchases should lower manufacturing costs and allow automakers to push down sticker prices, ultimately increasing demand, per experts.
“We’re already hearing from customers that they’re excited about this,” said Travis Katz, CEO of General Motors-owned BrightDrop, which sells electric delivery vans to FedEx, Walmart, and DHL Express Canada.
The trend extends to the public sector as well — a report from earlier this month indicated that the U.S. Postal Service is planning to purchase 66,000 EVs for its fleet by 2026.