Summary
- EV leasing has increased significantly in the past year and a half due to the Inflation Reduction Act of 2022
- Leasing loophole allows all EV buyers to benefit from the full $7,500 US EV tax credit
- The Act passed by Democrats is stimulating the sales of more EVs
- Leasing helps to pour more EVs into the market quickly and subsequently electrify the fleet of cars, trucks, and SUVs on US roads
- Tesla’s share of total EV sales in the US remains below 50%, possibly due to the leasing trend and the introduction of more EV options on the market.
Article
The EV leasing element of the Inflation Reduction Act of 2022 has significantly impacted the sale of electric vehicles in the past year and a half. The loophole allows all electric vehicles and EV buyers to benefit from the full $7,500 US EV tax credit, making it more affordable for consumers to lease EVs. As a result, leasing has become a much larger portion of electric vehicle sales, as shown in data from Cox Automotive based on Kelley Blue Book data. The clarification from the US Treasury Department that leased EVs can receive the full tax credit even if they weren’t produced in North America has prompted a surge in EV leasing.
The Inflation Reduction Act of 2022, passed by Democrats when they controlled the House of Representatives, Senate, and White House, has played a significant role in stimulating the sales of electric vehicles. Leasing has been identified as an ideal way to get more EVs on the road quickly, as leased vehicles join the used EV market in just a few years. This rapid turnover facilitates the electrification of the fleet of cars, trucks, and SUVs on US roads. Additionally, Tesla’s share of the total EV sales in the US has dropped below 50%, indicating a shift in the market dynamics with the introduction of new EV models and increased production by other automakers.
The growth of EV leasing in the country has led to various headlines related to the expansion of the EV market. The leasing loophole has played a crucial role in attracting consumers to consider EVs as a viable option by offering attractive entry pricing and great deals. The availability of leasing discounts has served as a selling pitch for EVs, enticing more people to switch to electric vehicles who may not have done so before. Maintaining the EV leasing loophole is seen as a critical factor in sustaining the growth of the EV market and driving the transition towards cleaner transportation options.
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