US EV Tax Credits Expire: Industry Braces for Uncertain Future Amid Shift to New Incentives

US EV Tax Credits Expire, Leaving Industry to Navigate Uncertain Future The federal electric vehicle (EV) tax credits in the US officially ended on Wednesday, marking a significant shift for the industry. The credits, which provided up to $7,500 toward the purchase of a new EV, had been a crucial factor in driving down the upfront costs of these vehicles and boosting adoption. According to data from the International Energy Agency (IEA), battery-electric vehicles still account for only a small percentage of new vehicle sales globally. However, as transportation remains one of the largest contributors to greenhouse-gas emissions worldwide - accounting for roughly 30% of total emissions - many experts believe that EVs will play a crucial role in reducing carbon footprints. "We've seen significant growth in EV adoption over the past few years, but this development is a setback," said Dr. Maria Rodriguez, an energy expert at the University of California, Berkeley. "The tax credits have been a game-changer for many consumers who were hesitant to make the switch due to higher upfront costs." Germany, which has also ended its own EV subsidy program, provides insight into what may be in store for the US market. In 2016, Germany introduced a €4,000 ($4,300) rebate for EV buyers, but it was phased out as sales increased and battery prices decreased. "The German experience shows that governments can't rely solely on subsidies to drive adoption," said Dr. Thomas Schäfer, an economist at the University of Munich. "Instead, they need to focus on creating a supportive policy environment, including investing in charging infrastructure and promoting sustainable transportation options." While EVs have already become more cost-effective than gas-powered vehicles when factoring in fuel savings, their higher upfront costs remain a barrier for many consumers. "The expiration of these tax credits is a significant blow to the US EV market," said Rachel Lin, an analyst at BloombergNEF. "However, we expect manufacturers to continue investing in EV technology and production capacity, as they see long-term potential for growth." As the industry navigates this uncertain terrain, many are calling on policymakers to implement alternative incentives that can help drive adoption. "The US government should consider implementing a federal EV rebate or other incentives to support the transition to electric vehicles," said Senator Ed Markey (D-Mass.), who has been a long-time advocate for climate action. "We need to ensure that we're providing Americans with affordable options for cleaner transportation." The expiration of the tax credits marks a turning point for the US EV market, and it remains to be seen how manufacturers, policymakers, and consumers will adapt in the coming months. In related news, several major automakers have announced plans to continue investing in EV production and technology development. General Motors, for example, has committed to launching 20 new EV models by 2025, while Tesla continues to expand its charging network across North America. As the industry looks ahead, one thing is clear: the US EV market will need to adapt quickly to changing circumstances if it hopes to meet growing demand and reduce greenhouse-gas emissions. *Reporting by Technologyreview.*