Assessment of light-duty electric vehicle costs and consumer benefits in the United States in the 2022–2035 time frame
Analyzing the impact of the Inflation Reduction Act on electric vehicle uptake in the United States
This study assesses the future impact of the Inflation Reduction Act (IRA) on electrification rates for light-duty and heavy-duty vehicle sales in the United States through 2035. The analysis considers low, moderate, and high scenarios, depending on how certain provisions of the IRA are implemented and how the value of incentives is passed on to consumers. For light-duty vehicles (LDVs), it also includes a scenario that considers states that may ultimately adopt California’s new Advanced Clean Cars rule (ACC II). For heavy-duty vehicles (HDVs), it considers states that have adopted California’s Advanced Clean Trucks rule and zero-emission vehicle targets.
For both the light and heavy-duty sectors, the analysis shows rapid electric vehicle uptake when considering both expected manufacturing cost reductions and the IRA incentives, as well as state policies. By 2030, electric vehicle sales shares are estimated to range from 48% to 61% in the light-duty sector, increasing to 56%–67% by 2032, the final year of the IRA tax credits. For heavy-duty, zero-emission vehicle sales share are estimated to range from 39% to 48% by 2030 and from 44% to 52% by 2032.
With the IRA, the U.S. Environmental Protection Agency can set more stringent federal light- and heavy-duty vehicle greenhouse gas standards than would have been possible otherwise, at lower cost and higher benefit to consumers and manufacturers. To meet climate goals, federal standards would need to drive electrification rates significantly higher than 50% by 2030 for light-duty vehicles and above 40% by 2030 for heavy-duty vehicles.
Note: This is an updated version to correct an earlier misstatement on our methodology on how the value of the Inflation Reduction Act tax credits are calculated. The previous version can be found here.