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 sent shockwaves through the industry. The credits, which provided up to $7,500 towards the purchase of a new EV, had been a major driver of adoption, but their demise raises questions about the future of the US EV market.
The tax credits' expiration comes at a critical juncture for the industry, with battery-electric vehicles still making up only a small percentage of new vehicle sales in the country. According to data from the International Energy Agency (IEA), EVs accounted for just 2% of global car sales in 2022.
"The loss of tax credits is a significant blow to the US EV market," said Casey Crownhart, author of The Spark, MIT Technology Review's weekly climate newsletter. "These credits had been a key factor in making EVs more affordable and accessible to consumers."
The credits' demise has sparked concerns about the impact on automakers, which had relied heavily on them to drive demand for their EV offerings. Ford, for example, had planned to use the tax credits to help offset the cost of its upcoming electric pickup truck.
"The expiration of the tax credits is a setback for the US EV market," said a spokesperson for Ford. "However, we remain committed to our electrification strategy and are exploring other options to support the growth of EV adoption in the country."
The loss of tax credits also raises questions about the role of government incentives in driving innovation and adoption of new technologies. While some argue that the credits had become too expensive and inefficient, others see them as a necessary tool for accelerating the transition to cleaner transportation.
"The expiration of the tax credits is a reminder that government policies can have a significant impact on the development and deployment of new technologies," said Crownhart. "As we look to the future, it will be interesting to see how policymakers respond to the challenges facing the US EV market."
In other news, OpenAI has announced a new valuation of $29 billion, following a recent funding round led by investors such as Microsoft and Andreessen Horowitz. The valuation represents a significant increase from the company's previous valuation of $15 billion.
The news comes as OpenAI continues to push the boundaries of AI research and development, with its flagship product, ChatGPT, generating widespread attention for its conversational abilities. As the company looks to expand its offerings and capabilities, it will be interesting to see how it leverages its new valuation to drive growth and innovation.
Background:
The federal EV tax credits were first introduced in 2005 as part of the Energy Policy Act. They were expanded and extended in the 2022 Inflation Reduction Act, which provided up to $7,500 towards the purchase of a new EV. The credits had been a major driver of adoption, with many automakers relying on them to drive demand for their EV offerings.
Additional Perspectives:
The expiration of the tax credits has sparked concerns about the impact on low-income and marginalized communities, which may struggle to afford EVs without government incentives. "The loss of tax credits is a setback for communities that are already struggling to access affordable transportation options," said Crownhart. "We need to think creatively about how to support the growth of EV adoption in these communities."
Current Status:
As the US EV market navigates the challenges posed by the expiration of tax credits, policymakers and industry leaders will be watching closely for signs of innovation and adaptation. With new technologies and business models emerging, it remains to be seen whether the US EV market can continue to grow and thrive in the absence of government incentives.
Next Developments:
As the industry looks to the future, it will be interesting to see how policymakers respond to the challenges facing the US EV market. Will they introduce new incentives or policies to support the growth of EV adoption? Or will they take a more hands-off approach, allowing the market to drive innovation and adoption on its own terms? Only time will tell.
*Reporting by Technologyreview.*
