In total, companies have announced over $76 billion in private investments in climate technology manufacturing since the IRA was signed into law.
Then: There were early concerns that restrictions in the EV tax credits could limit how many vehicles would wind up qualifying for them, limiting their effectiveness.
The rules lay out that consumers would only get the full $7,500 credit for a new EV if the vehicle is made from materials and batteries from the US (or free trade agreement partners). The rules attached to the credits were aimed at boosting US production of battery minerals, components, and cells. At the time, it wasn’t totally clear exactly how everything would get interpreted, and just how restrictive these would wind up being.
Now: We’ve gotten some clarity on most of the EV tax credits, and it seems like the agency has largely erred on the side of allowing more vehicles to qualify. But even today, there are looming questions on this major program.
Namely, there’s a bit that excludes EVs that have a “foreign entity of concern” involved in their supply chain starting in 2024. That term hasn’t really been defined yet—though there’s a chance that China, which dominates several parts of the EV supply chain, will fall into that category.
Check out my story on the EV credits from last year for more on what that could mean for battery prices and EV ownership. I’d also recommend looking back at a newsletter from my colleague Zeyi Yang about how EV batteries could be the next point of tension between the US and China.
Greenhouse gas emissions
Then: The number I heard over and over last year was 40%—experts said that the IRA would cut US emissions by 40% from 2005 levels by 2030. It was more than what the country was on track for (around a 30% to 35% cut) but less than what the country needs to do to meet international targets (a 50% reduction).
Thinking about how modeling experts go from hundreds of billions of dollars to an expected emissions cut broke my brain a little, so I dove into the weeds and spoke with several of them for a story last August about how predicting the results of economic policies like the IRA is tricky.