Americans have now claimed more than $1 billion in new EV purchase credits and other point-of-sale subsidies under the Inflation Reduction Act, the U.S. Treasury Department announced Wednesday morning, calling it a "major milestone" for the program that went into effect in January. More than 150,000 total payments have been issued under the program, the administration said, and more than 125,000 of those were advance tax credits for new electrified vehicles.
"President Biden’s Inflation Reduction Act is lowering costs for electric vehicle purchases, with more than $1 billion in upfront savings for American consumers since January. This discount is increasing consumer choices and creating new opportunities for companies to expand their customer base," said Secretary of the Treasury Janet L. Yellen. “Consumers are saving up front and over time, with $1,750 savings on gas and maintenance each year and $21,000 saved over the lifetime of a vehicle."
The long-term savings may sound an awful lot like a Tesla sales pitch, but the administration offered some data to back up its math.
"Building on analysis from Energy Innovation Policy & Technology, Treasury’s Office of Economic Policy estimates that, when discounting expected annual savings over the 15-year lifespan of a vehicle, owners of electric vehicles will save $18,000 to $24,000 more than if they had purchased a comparable gasoline vehicle instead. Fuel is the largest contributor to these savings," the announcement said. "Although both gas and electricity costs vary markedly by geography, fuel costs per mile are typically substantially lower for electric vehicles than for similar gas-powered vehicles."
Citing the same analysis, the administration said that maintenance costs for EVs are typically about 40% lower than they are for ICE equivalents.
The IRA is structured to favor electric and plug-in hybrid vehicles built in the USA, however the administration recently loosened some restrictions on EV battery sourcing, potentially making more vehicles eligible for credits in coming model years as the process is ironed out.
