Governments around the world, in an effort to bring down carbon emissions and push for EV adoption, offer tax credits, rebates, and benefits to anyone who purchases a qualifying electric (and in some cases, hybrid) vehicle. On February 17, 2009, President Barack Obama signed the American Recovery and Reinvestment Act. The law put in motion the tax credits that are still today used in the U.S. when buying a plug-in EV.
While the law served to boost EV sales in the country, it has been criticized for its limitations. The law states that any EV model built by a carmaker that has sold more than 200,000 units is not eligible for the tax credit, which leaves Tesla and GM out of the game. Unfortunately, attempts to eliminate this "phase-out" condition haven’t been successful. Additionally, new propositions aim to expand the tax credit.
In 2021, the Clean Energy Act for America, included in the Build Back Better Act of President Joe Biden, began its way across the Senate and Congress chambers. The Hill reported on April 22, 2022, that U.S. Secretary of Energy Jennifer Granholm believed the law would pass in Congress before November’s midterm elections. Volt Equity explains that the act would increase the federal tax credit and remove the 200,000-vehicles-sold limit in an effort to put the brakes on Chinese EV sales in America. However, the law will not cover Tesla as the company does not employ unionized labor. Besides federal tax credits, states also offer local incentives, credits, and rebates.