Climate bill offers boost to EVs. Why short-term sales may slump.
The outlook for America’s electric vehicles is bright. Sales and registrations of EVs are starting to rocket upward. President Joe Biden is poised to sign a climate change bill today that would shower drivers with even better incentives to go electric.
But those subsidies may short-circuit EV sales, at least for the short term. In trying to balance competing interests, Congress has passed a bill that will force automakers to diversify away from China, retool their supply chains, and make less expensive cars if they want their products to qualify for the incentives.
There’s no question that the bill represents the United States’ boldest move yet to address climate change, causing House Democrats to cheer after passing it Friday and leaving Republicans fuming at the $437 billion in new spending and the $737 billion in taxes and other – the bill expands Medicare benefits and allows the federal government to negotiate some drug prices for Medicare. Most of the funding goes toward reducing greenhouse gas emissions through tax credits and rebates for solar, wind, and other green technologies, including EVs. The vehicle portion of the bill illustrates the economic, environmental, political, and geopolitical trade-offs involved in trying to move the U.S. to a lower carbon future.
