The Biden administration on Friday issued guidelines making most of the country eligible for tax credits to offset the cost of installing electric vehicle chargers.
Consumers and businesses can claim the credit for charging equipment installed for public or private use in homes or business premises. The initiative aims to make it more affordable for Americans to use electric vehicle chargers, which will need to be widely available in the United States to meet the Biden administration’s goal of having electric vehicles make up half of new car sales by 2030.
Before Friday’s guidance, it was unclear which areas could qualify for the tax credit. Eligible chargers had to be placed in either low-income or non-urban areas, but it was unclear how many locations would fall into those categories.
The Treasury chose to make a broad set of locations eligible, covering much of the country outside of major cities. The designated areas cover about two-thirds of the U.S. population, Treasury Department spokeswoman Ashley Shapitle said in a statement.
Wally Adeyemo, the deputy minister of finance, pointed to the increase in sales of electric vehicles last year and said the administration expects the new guidance to promote more progress this year.
“Additional clarity around the Act’s incentive to build new charging infrastructure in communities that need it most will help drive continued progress in 2024,” Mr Adeyemo said in a statement.
Individuals and businesses purchasing chargers or other eligible charging equipment can receive a credit of up to 30 percent of the installation cost.
Clean energy advocates said the wider availability of tax credits would accelerate the installation of chargers across the country, helping to drive wider adoption of electric vehicles. Sales of such vehicles have grown faster than any other major car segment, but demand has not grown as much as expected. This prompted some car manufacturers to withdraw their production.
The Biden administration is trying to entice consumers to buy electric vehicles by offering tax credits of up to $7,500 per vehicle. The federal government is also spending billions of dollars to help build a national network of reliable high-speed chargers, but rollout has been slow.
Luke Tonachel, a senior director at the Natural Resources Defense Council, said more clarity about eligible sites could have sped up the development of charging infrastructure last year, and there were concerns that federal officials would not make the credit widely available. However, he said the new guidance will now help speed up the installation of more chargers.
“I would expect that with this clarity, there will be both businesses and consumers investing more in charging, knowing that this is now available,” Mr Tonachel said.
Albert Gore III, executive director of the Zero Emission Transportation Association, an industry group, said the new guidance was a “positive step” that would help attract more investment to rural and low-income communities.
“It will significantly increase the availability of public charging,” Mr Gore said. “We’re very happy to see where the guidance has gone.”
