EV Leases Soar in USA — Thanks, Inflation Reduction Act
Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
I’ve gotten a lot more background on how the EV lease element of the Inflation Reduction Act came to be what it is. It’s an interesting story for another day. But a key here today is that leasing has become a much bigger portion of electric vehicle sales in the past year and a half — and it’s all about the Inflation Reduction Act of 2022.
First of all, let’s just briefly explaining the leasing loophole. What the loophole does is it allows all electric vehicles and EV buyers to benefit from the full $7,500 US EV tax credit. Of course, the dealer is then in charge of determining how that gets applied to a consumer’s lease, so make sure you talk about it and push for the maximum benefit, but it’s clear this is being used to get more people into EVs, and the best evidence is a new graph from Cox Automotive based on Kelley Blue Book data. Here it is:
EV LEASE PENETRATION OF RETAIL SALES VERSUS INDUSTRY
As we can see there, after the US Treasury Department clarified that leased EVs could receive the full $7,500 EV tax credit even if they weren’t produced in North America, EV leasing soared. Leasing went from a lower percentage of the US EV industry than it is in the broader auto industry to almost double the broader auto industry percentage.
More broadly, a key here is that the Inflation Reduction Act of 2022, passed by Democrats when the controlled the House of Representatives and the Senate — and the White House of course — is stimulating the sales of many more electric vehicles.
Also, notably, as one reader pointed out at some point, leasing is an ideal way to get more EVs out onto the road, because then these EVs join the used EV market in just a few years. With a full sale, an owner may keep their EV for 5 or 10 years, or more. (As I’m doing.) Leasing has the quickest turnover and is the fastest way to pour more EVs into the market. So, this is an excellent way to electrify the fleet of cars, trucks, and SUVs on US roads.
Interestingly, in approximately the same time period, the US EV industry has gone from Tesla dominating it to Tesla dropping below 50% of EV sales.
TESLA SHARE OF TOTAL EV SALES REMAINS BELOW 50%
That’s not to say there’s a direct link between the leasing loophole and Tesla’s share of the US EV market. In actuality, a lot more EV options have come onto the market in that timeframe and have had their production, and thus sales, ramp up. Also, other factors seem to be hurting Tesla sales, but we’ve written about those enough lately. However, tying it back to that leasing trend, I think one thing we can say is that alongside the new models, the leasing discounts offer a great selling pitch, attractive entry pricing, and just overall great deals for EVs that are getting more people into EVs who didn’t really consider them before.
And I think these headlines are all related to the growth of EV leasing in the country:
Keep the EV leasing loophole going and keep the EV growth coming!
Chip in a few dollars a month to help support independent cleantech coverage that helps to accelerate the cleantech revolution!
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
CleanTechnica uses affiliate links. See our policy here.
CleanTechnica’s Comment Policy
This post has been syndicated from a third-party source. View the original article here.
