EV provisions in the Inflation Reduction Act protect our national security

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Title: EV provisions in the Inflation Reduction Act protect our national security Originally reported on thehill.com by Katherine Stainken, opinion contributor

|20000604 • National Security|United States • ISO 3166-2:US 840 USA |Politics • 11000000|

The Inflation Reduction Act of 2022 is the most significant piece of legislation to advance electric vehicles (EVs) in the nation’s history. Its passage is crucial to reducing the stranglehold that oil has on our nation’s transportation systems and, in turn, protecting our national security. Russia’s war against Ukraine, which is enabled by oil revenues, highlights the urgency to accelerate transportation electrification. EVs powered by our nation’s domestic electric grid will diversify the way we power transportation, reducing the U.S. and global oil demand.

The new law brings a variety of incentives that support transportation electrification. Many of these policies are long sought-after goals of groups like mine, the Electrification Coalition. The future of a transportation system that is fueled by domestic electricity has never looked brighter.

These measures include an extension of the federal light-duty EV tax credit, which provides up to $7,500 with the purchase of an EV, through 2032. This long-term extension will benefit the millions of consumers that will be switching from fossil fuel-powered cars to electric vehicles over the next decade. Over the past decade, the credit has been a critical driver in the transition to EVs as we hit manufacturing scale and, in turn, has spurred American innovation, significant private sector investments and increased manufacturing.

With the rose, though, comes the thorn. Beginning in 2023, to be eligible for the full credit, 40 percent of the vehicle’s critical minerals must be mined or processed in the U.S. or countries with which we have a free trade agreement or recycled in North America. Likewise, 50 percent of battery components must be manufactured or assembled in North America, with both of those percentages increasing over the next few years.

These requirements will be a challenge for automakers and, indeed, they should have been more gradually phased in and included more friendly countries to ensure that a greater number of EVs are eligible for the full tax credit.

Nevertheless, as we shift from a fossil fuel-based economy to a minerals-based economy, we cannot trade the instability of purchasing oil from unfriendly counties for purchasing minerals from unfriendly countries. We must ensure that the mining, processing and recycling of these crucial minerals are done responsibly within our borders and by our allies. These provisions accomplish that while setting the U.S. up for successful long-term growth of the EV market — both on the light-duty side and for the medium- and heavy-duty sectors.

A new tax credit of up to $4,000 on used EVs will make certain that these vehicles continue to have a life beyond their first owner. It will also get more clean vehicles into historically underrepresented communities, which are often disproportionately affected by air pollution. Consumers will also benefit from the lower fuel and maintenance costs of an EV, which can save drivers more than $2,000 each year in fuel costs.

Additionally, electrification is about to revolutionize commercial freight and transit. Medium- and heavy-duty vehicles made up only 5 percent of vehicles registered in 2018, but over 26 percent of the U.S. transportation sector’s fuel consumption. We cannot reduce the negative effects of our transportation sector’s dependence on oil without transitioning medium- and heavy-duty vehicles. The new tax credit for medium- and heavy-duty EVs, included in the Inflation Reduction Act, will accelerate commercial freight electrification by reducing the higher up-front capital costs of transitioning to electric vehicles and will lead to lower transportation costs and emissions in the long run.

Robust charging infrastructure is also critical to accelerating electrification. The passage of the Infrastructure Investment and Jobs Act last year provided funding to begin building out a national charging network. The long-term extension of the Alternative Fuel Vehicle Refueling Property Credit in the Inflation Reduction Act will allow more homes and businesses to install charging equipment that powers vehicles with domestic electricity.

There are several other measures in the new Inflation Reduction Act that further advance electrification, including important funding to electrify the U.S. Postal Service fleet and critical incentives for EV manufacturing and supply chains.

Just a few short weeks ago, as consumer demand for electric vehicles was at an all-time high amidst record-high gas prices, it seemed unlikely that Congress would do its part to secure our nation by reducing our dependence on oil. Thankfully, Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) negotiated this landmark deal and the president signed it into law.

For over a century, oil has been at the center of our transportation systems and our economy, leading to instability around the world, as well as instability in family and business budgets. The measures in the Inflation Reduction Act will help to end this dependence — it is indeed the EV moment.

Katherine Stainken is the vice president of policy at the Electrification Coalition (EC), which is focused on transitioning our transportation sector to electric.

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