Electric vehicles have been increasing in popularity—with 25% of Americans set to buy them as their next autos, per a AAA study. Now Washington is giving an extra push for EVs, under legislation that President Joe Biden signed Tuesday afternoon.
Some $370 billion in health care, tax and climate bill (packaged as the Inflation Reduction Act) will go toward EVs. As a result, “We believe we’re going to see a really rising tide for the entire electric vehicle industry,” Jay Jacobs, BlackRock’s U.S. head of thematic and active equity ETFs, told Yahoo Finance Live.
The measure will “dramatically bolster the U.S. clean energy industry to ensure our nation competes in the global economy of the future,” said a statement by Ceres, a nonprofit that pushes sustainability.
EVs and hybrids account for 12.9% of U.S. auto sales in the second quarter, from the year-before period. That is about half the levels in Europe.
The new federal support comes mainly in the form of tax credits of up to $7,500, although there are restrictions, such as the EVs be made in North America and can’t be too pricey. The bill expands use of a smaller group of incentives.
General Motors and Ford Motor already are embarking on ambitious EV programs. Thus far, the new government EV money hasn’t boosted auto stocks. Tesla, a largely pure-play EV company, is down 18% this year. GM is off 36% and Ford 24%.