The Biden administration released a new proposal to expand the number of electric vehicle chargers eligible for tax credits across the country.
It comes as the administration has sought to increase incentives for people to choose EVs over gas and diesel-powered vehicles in an attempt to lower carbon emissions. However, many drivers have remained hesitant to make the switch to electric due to a shortage of public charging hubs. With over an estimated 3 million EVs on the roads, there are only around 192,000 publicly available charging stations. The White House has said it aims to have 500,000 by 2030 but has seen slow progress since early 2023.
The proposal, issued by the Department of the Treasury and IRS on Wednesday, would clarify that the tax credits can apply to individual charging ports and not just charging stations, meaning businesses can claim the credits several times if they have a charger that can power multiple vehicles at the same time.
The tax credits were first introduced through the 2022 Democratic Inflation Reduction Act, saving eligible businesses and people 30% off the cost of installing necessary charging stations for their EVs. Individuals are able to claim up to $1,000, while businesses can receive a credit of $100,000.
Multiple administration officials have touted the proposed expanded credit eligibility as a way to lower transportation costs while encouraging more drivers to opt for EVs.
“Building out America’s charging infrastructure will make transportation more affordable, the air around our roads more breathable, and U.S. emissions trajectory more sustainable — all while creating good-paying jobs across America,” said Ali Zaidi, President Joe Biden’s national climate adviser. “Today’s important guidance will accelerate capital formation and project investment into this critical infrastructure sector and position the U.S. to lead the global clean energy economy.”
Earlier this year, the administration issued additional guidance on who would be eligible for the tax credit based on where the charging ports are located. The eligible hubs must be located in areas considered low-income and not urban. The administration has estimated that around two-thirds of Americans live in these regions.
Republicans have sought to overturn the guidance, claiming that it subsidizes rich areas, such as Martha’s Vineyard and Beverly Hills, rather than poor neighborhoods.
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It also received criticism from now-independent Sen. Joe Manchin (I-WV), one of the main architects of the Inflation Reduction Act. In January, the West Virginia senator said the guidance “spits in the face of rural America.”
“This proposed guidance ensures that rural Americans will remain stuck at the end of the investment line, the exact problem this tax credit was supposed to address, choosing to give hand-outs to those that don’t need it while ignoring its responsibility to provide a hand up to rural communities at risk of being left behind,” Manchin said.