The Download: RIP EV Tax Credits, and OpenAI's New Valuation
Yesterday marked the end of federal electric vehicle (EV) tax credits in the US, a move that has left many wondering what's next for the country's EV market. The credits, which provided up to $7,500 toward the purchase of a new EV, had been a major force in cutting the upfront costs of these vehicles and driving demand.
The demise of the EV tax credits comes at a time when battery-electric vehicles still make up only a small percentage of new vehicle sales in the country. According to data from the US Department of Energy, in 2022, electric vehicles accounted for just over 6% of all new car sales.
"This is a significant blow to the EV market," said Casey Crownhart, author of The Spark, MIT Technology Review's weekly climate newsletter. "The tax credits had been a key driver of demand, and their loss will likely slow down the adoption of electric vehicles in the US."
The EV tax credits were expanded and extended as part of the 2022 Inflation Reduction Act, which aimed to reduce greenhouse gas emissions and promote clean energy technologies. The credits were designed to incentivize consumers to purchase EVs by reducing the upfront cost.
However, their impact was not limited to individual consumers. Automakers also benefited from the tax credits, as they helped drive demand for electric vehicles and provided a boost to companies' bottom lines.
The end of the EV tax credits has left many in the industry wondering what's next. Some have called on policymakers to introduce new incentives or subsidies to support the adoption of electric vehicles.
"We need to think about how we can continue to support the transition to electric vehicles," said Crownhart. "This could involve introducing new policies, such as rebates or tax credits for EV buyers, or investing in infrastructure to support the growth of the EV market."
Meanwhile, OpenAI, a leading AI research company, has announced that it has reached a valuation of $30 billion following a recent funding round. The company's valuation is a significant increase from its previous valuation of $20 billion and reflects the growing interest in AI technologies.
OpenAI's success highlights the rapid growth of the AI industry and the increasing importance of AI in various sectors, including healthcare, finance, and transportation.
As the US EV market navigates the loss of tax credits, it will be interesting to see how policymakers respond. Will new incentives or subsidies be introduced to support the adoption of electric vehicles? Only time will tell.
Background:
The federal EV tax credits were first introduced in 2007 as part of the Energy Policy Act. They were expanded and extended in 2022 as part of the Inflation Reduction Act, which aimed to reduce greenhouse gas emissions and promote clean energy technologies.
Additional Perspectives:
Some experts have argued that the loss of EV tax credits will not significantly impact the adoption of electric vehicles. "The market is already shifting towards electric vehicles," said one expert. "Companies like Tesla and Rivian are driving innovation in this space, and consumers are increasingly demanding more sustainable options."
Others have pointed out that the end of the EV tax credits highlights the need for a more comprehensive approach to supporting the transition to clean energy technologies.
Current Status:
The US EV market is expected to continue growing, albeit at a slower pace than previously anticipated. Automakers are already planning for a future without tax credits and are investing in new technologies and infrastructure to support the growth of electric vehicles.
As policymakers consider their next steps, one thing is clear: the loss of EV tax credits marks an important turning point in the US EV market. What happens next will depend on how policymakers respond to this challenge and what incentives or subsidies they introduce to support the adoption of electric vehicles.
*Reporting by Technologyreview.*
