On a bi-weekly basis, CAR welcomes our audience to decompress with our President and CEO, Carla Bailo, as she covers and shares her thoughts on the latest Hot Topics happening in the automotive industry. While the biweekly newsletter primarily covers three topics, this feature story previews one of the topics covered on August 12, 2022. If you would like access to the full newsletter for better insights into critical industry issues you and your organization are facing, sign up for our mailing list here.


HOT TOPICS 8/8/2022 – 8/12/2022


Inflation Reduction Act and EV Tax Credit

Carla’s thoughts:

The famous questions being asked to the CAR team this week is, “Will this really help propel EV sales, and will it help to achieve 50% EV sales by 2030?” These questions are really too simplistic considering all the elements in this act, but let me give you my reasoning.

The 200,000 vehicle cap removal is a good thing as too many manufacturers have already achieved this level, and it is essentially meaningless for achieving the EV and environmental goals. The household income and vehicle price bands are good, but we must notice that very few EVs on the market today are below the established prices. Some are coming out within the new year, but very few exist today. When we reach the lower price, it is the same time as the NA content, OR free trade agreement content percentages kick in (starting in 2024). 

This content percentage is the devil in this deal. There isn’t a single car that can meet the levels required today, and considering where the raw materials come from and where they are refined, 2024 is a huge stretch. Then, each year, the content increases by 10%.

The comment from Senator Manchin is, “let’s just build mines.” If only it were that easy – we don’t have Dorothy slippers to magically build a mine, a refinery, or a recycling center. Not to mention that we must make these centers sustainable, safe, and environmentally friendly. Additionally, States/Municipalities need to figure out where to put them as most people don’t want them in “their backyard.”  

BUT, most vehicles can still obtain the smaller $3750 tax incentive, and another good point is that used vehicles can receive this tax incentive. We don’t have enough used vehicles, but this will change over the years.

Another key point is that we need to conduct much more research here in the US for mining, batteries, and battery recycling – we aren’t anywhere close to the amount of money China is putting into this research. This research must happen to achieve and maintain our leadership position in electrification…we have much more work to do!





Carla Bailo

Carla Bailo

President & CEO

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