The start of the New Year ushers in a new wave of government benefits for Americans nationwide. The Inflation Reduction Act (IRA) is a landmark piece of legislation filled with a multitude of benefits that will impact our healthcare system, small business owners, homeowners, and fleet owners alike. For companies that operate trucking fleets, the most exciting impact of the IRA is the promise of money-saving tax credits when they transition to battery-electric vehicles. And these credits have the potential to save fleets hundreds of thousands of dollars.
Outlined in the IRA is a commitment to direct $400 billion in federal funding to investments toward clean energy. The goal is to substantially lower the nation’s carbon emissions by the end of this decade. The funds will be focused on two primary categories—clean electricity and transmission, and electric vehicle incentives—and will be received through a mix of tax credits, grants, and loan guarantees for corporations. For commercial trucking fleets, these savings will be monumental.
Take, for example, a fleet looking to purchase a new medium-duty commercial truck. For a truck with a GVWR of above 14,000 lbs. and a battery capacity of at least 15kWh, a tax credit will allow the buyer to deduct the lesser of 30% of the vehicle sales price or the difference between the purchase price of the commercial EV and a comparable internal combustion engine (ICE) vehicle. A credit of up to $40,000 per vehicle can be applied; a profound savings whether you operate 10 trucks or 100 trucks.
I’m energized about the momentum that the Inflation Reduction Act will bring to fleet electrification in 2023. With a strong focus on increasing investments in clean energy and providing incentives for both consumers and businesses alike, the U.S. will be able to significantly drive down emissions and improve the state of our national energy security. We won’t be as reliant on tumultuous overseas markets and will be able to further solidify the clean energy foundation we’re building for generations to come. With the IRA, the promise of a cleaner, more sustainable world that was once a pipe dream is now within reach.
If you’re a fleet owner or operator looking to collect credits for the purchase of electric vehicles this year, click here to download the free Tax Credit Info Guide to walk you through the steps.
Dakota Semler is the co-founder and CEO of Xos Inc.
