President Joe Biden is encouraging the use of electric vehicles in the commercial transportation industry by offering a tax credit of 30% of the vehicle’s purchase price (up to $40,000 per unit) with the Inflation Reduction Act of 2022.
Nick Kappas, a federal tax credit transactions attorney at Thompson Coburn, stated that this act would likely lead to many electric vehicle acquisitions through battery or hydrogen fuel cell-powered conversion or upgrades.
Kappas highlighted the absence of domestic production, supply chain, and battery component requirements as a bonus for companies to switch to electric vehicles. He commented, “in terms of taxation, it is quite straightforward, and you can get a tax break, and many programs motivate spending through the awarding of credits.”
Kappas suggested that those who take up electric vehicles early will be the first to take advantage of the credits. However, he predicted that other companies would follow suit. He concluded that the objective of the code section is that carriers will recognize that investing sooner will offer savings in the long run.
The IIJA has plans for a large-scale network of electric vehicle chargers and aims for 50% of new car sales to be electric by 2030. According to Accelera by Cummins General Manager Brian Wilson, government programs are promoting zero-emission technologies, and market incentives and improved technology & availability are making them more affordable.
Additionally, shippers encourage fleets to use cleaner supply chains with various government incentives, such as research & development, capital, and reduced upfront costs.
Joel Morrow of Alpha Drivers Testing & Consulting went around the United States to inquire if a truck driver could design a truck. The Truckload Carriers Association noted that there are obstacles to government regulations preventing the large-scale acceptance of electric trucks due to a lack of technology and charging infrastructure.
The U.S. Government agreed to achieve zero-emission for all new medium- and heavy-duty vehicles by 2040, which the Association strongly opposed. Dave Heller, the group’s senior VP of government affairs, expressed their desire to be included in the discussion. He highlighted the need to evaluate three elements to assess the viability of electric trucks: achievability, reliability, and affordability of the technology.
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