Shocker: Democrats’ Inflation Reduction Act Led To A Lot More EV Sales

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Last Updated on: 13th March 2025, 12:43 am

Democrats and President Joe Biden revived the US EV tax credit for some companies, like Tesla, and expanded it to include coverage for things not covered before — like used electric cars. One change in particular, though, was especially useful. A loophole was included (accidentally, from background info I’ve been provided on it) that allowed dealers to collect the tax credit on any EVs they leased (and then pass that on to customers, presumably). All in all, it was assumed that the renewed and expanded EV tax credit would lead to more EV sales, which would help slow down climate catastrophe and clean up the air.

But — how does one prove that? Yes, EV sales grew in 2024, but not dramatically. Did sales increase solely from word of mouth? Did they increase due to the growing number of options on the market and the improving technology, including cars getting more range and faster charging? Did they increase due to growing public concern about our climate crisis? (Haha.)

As I was going through J.D. Power’s findings in its new 2025 U.S. Electric Vehicle Experience (EVX) Ownership Study, something big popped out to me. J.D. Power confirmed that the Inflation Reduction Act (IRA) did in fact lead to a lot more EV sales.

“Notably, updates to the Inflation Reduction Act more than doubled the amount of owners who indicated they received a federal tax credit/rebate, and more than half of BEV buyers cited tax credits as a reason for purchasing their vehicle, which is among the most influential purchase drivers. As a result, J.D. Power is forecasting EV share of retail sales to remain flat in 2025,” J.D. Power wrote. The company also noted that there’s a lot of concern in the industry that the Trump administration and Republicans in Congress will kill or weaken the EV subsidies. If that happens, EV sales are expected to take a hit, and now that we know “more than half of BEV buyers cited tax credits as a reason for purchasing their vehicle,” well, we can definitely expect an EV sales hit if they pull the plug on these policies.

Looking backward, though, the good news is that US EV sales increased last year. “Notable, too, is that year-end retail sales data from J.D. Power shows that BEVs reached a market share of 9.1% in 2024, up from 8.4% in 2023, fueled in part by a growing number of mass market BEV models entering the market,” J.D. Power wrote.

Another notable driver of growth was improving, growing EV charging infrastructure. “Public charging woes persist but improvement seen among mass market owners: Although a significant gap in satisfaction regarding public charger availability still exists between premium and mass market BEV owners, it is now narrower than ever before. Among mass market BEV owners, satisfaction is up 86 points year over year (396) as infrastructure buildout continues and brands benefit from the opening of the Tesla Supercharger network. Satisfaction with public charger availability is highest among owners of premium BEVs (551).” Of course, the Bipartisan Infrastructure Law and the IRA provided a lot of funding to expand EV charging infrastructure around the United States. So, again, some of these policies passed by Democrats are leading to more EV sales. Who would’ve thought?