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Congress offers new tax credit incentives for electric vehicles

If you cruise around the car dealerships in this area the lots appear to be fairly full again even if it's a lot of used cars.

BUFFALO, New York — There are more incentives on the way from Washington with the goal to get drivers to shift to electric vehicles. So 2 On Your Side looked at some questions on how things may happen here in Western New York and the impact on the car-buying public.

If you cruise around the car dealerships in this area the lots appear to be fairly full again even if it's a lot of used cars.

But what about the electric vehicles now being pushed with climate change policies from many of our national leaders?

Well, there is apparently another supply chain issue according to Paul Stasiak who is President of the Niagara Frontier Auto Dealers Association. He says "It's really battery availability for these vehicles. I think you read the paper every day - every manufacturer is investing billions to bring these products to market."

And then price. Many would-be buyers feel they're still too expensive with sticker costs in the $40 to 50 thousand and up range. While there are some cheaper models and some manufacturers like GM and Honda are working together to try and come up with more affordable EVs in competition with Tesla, prices may stay higher for now. Stasiak points out, "The more they produce, the more price sensitive they become. I think every vehicle right now is in short supply so you don't see incentives. It's hard to get a gauge on the price of an EV because they're just - we're still years away from a volume quantity."     

So Congress included tax credit incentives of $7,500 to buy an EV in the latest version of what's called the Inflation Reduction Act which passed in the U.S. Senate and is now under consideration in the U.S. House of Representatives. 

"These tax incentives and the talk of tax incentives are going to drive more attention and awareness. So as there are more incentives, more government awareness, and government support to push this initiative - consumers will follow that track," Stasiak said.

However, the Associated Press reports many EV purchases may not qualify for such credits because the batteries must be made in the US with minerals mined or recycled here. 

And some car manufacturers claim those rules get more stringent in years to come since the vast majority of the batteries are currently produced in China with lithium mined outside the US. 

Car companies like GM are trying to build EV car battery plants in Ohio and elsewhere but it's a potential roadblock for now. There are also efforts to open more lithium mines in the US but ironically there are environmental concerns. 

Stasiak told us, "I don't think there's any manufacturer that can meet the demand because of the raw material availability of battery production. So it's a good problem for Ford and General Motors and Cadillac and BMW to have. They got people willing to buy 'em and trying to find a way to get 'em. So the order pipeline will be here for years I believe."

We asked if that's the lithium you're talking about - primarily the product item that they need?  

Stasiak: "Absolutely."

Stasiak actually suggests people consider for now buying a hybrid vehicle with a blend of gas and electric for power.  

 

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