In Florida, electric golf carts have long been popular but now have to share the road with more high-end electric vehicles like Teslas and Rivians. The state generates about 7 percent of its electricity from renewables, mainly solar. Section 30D of the Inflation Reduction Act provides tax credits for electric vehicle purchases with geographic restrictions aimed at promoting domestic production of critical minerals and battery components.
Initial enacted in 2008, section 30D was changed by the IRA to include restrictions on the source of critical minerals and battery components. Vehicles utilizing these materials from foreign entities of concern are excluded from the credit. China currently dominates the production of graphite, lithium, and cobalt, which are critical minerals used in EV batteries. The United States is working to increase its production to reduce reliance on foreign sources.
There has been controversy over proposed regulations regarding the determination of critical minerals and battery components that comply with the foreign entity of concern rules. A proposed bill introduced by Rep. Carol D. Miller aims to further restrict eligibility for the EV tax credit by excluding any involvement of prohibited foreign entities in the production of EV components. The bill seeks to reduce ties to strategic adversaries in EV manufacturing processes.
Geographical distribution of EV production in the United States is not uniform, with Western states receiving fewer projects compared to the East Coast. The Department of Energy has identified over $35 billion in nationwide investments in EV assembly, charger manufacturing, and components manufacturing projects. The uptake of EVs is also not uniform, with professionals on the coasts favoring high-end models like Lucids, Rivians, and Teslas, while other car buyers may have concerns about the cost savings and accessibility of EVs.
Tesla, a prominent electric vehicle manufacturer, faced a 55 percent drop in net income in the first quarter of 2024 despite the popularity of their vehicles. The high cost of entry for vehicles like the Tesla Cybertruck may limit their appeal to a broader market. The DOE is working to promote the cost savings of EVs to encourage more widespread adoption, but challenges remain in increasing diversity in geographical distribution for electric vehicles. Overall, the landscape of EV production and adoption in the United States is evolving, with a focus on domestic production of critical materials and components for EVs.
