August 16, 2022 Press Release

Auto Innovators Statement on Enactment of Inflation Reduction Act

WASHINGTON, DC – The Alliance for Automotive Innovation today released the following statement after President Biden signed into law the Inflation Reduction Act, legislation with automotive manufacturing and consumer purchase incentives to expand vehicle electrification in the United States.

John Bozzella, president and CEO of the Alliance for Automotive Innovation said: “The Inflation Reduction Act recognizes the enormity of the automotive industrial base transformation currently underway. Automakers have already invested more than $100 billion in vehicle electrification – expanding the production of EVs inside the United States and across North America and locating raw material and battery components on American soil.

“On the demand front, we’ve said the legislation’s purchase incentive was a missed opportunity, especially while raw material and battery supply chains are still coming into place.

“But Congress also made some meaningful investments on the supply side. There is more than $15.5 billion in incentives and grants to ensure the United States is building automotive supply chains and a globally competitive battery manufacturing platform. Over the long haul, that’s going to be essential to making the widest range of EVs available to millions of additional drivers in all corners of the country.

“The auto industry will continue to work with the Biden administration and Treasury Department as they issue critical guidance and new regulations – so the EV tax credit is as available and beneficial to consumers as possible, and the manufacturing provisions accelerate the auto transformation already in progress.”

Automotive manufacturing provisions in the Inflation Reduction Act:

Supply Chain

Extension of the Advanced Energy Project Credit: Expands the qualifications for, and allocation of, advanced energy project credits. Within 180 days of enactment, a program must be implemented by the Treasury Department to grant certification to applications. The provision allows the Secretary to allocate an additional $10 billion in tax credits to qualifying projects. Eligibility is expanded to include projects to establish, expand or re-equip facilities for advanced light, medium, and heavy-duty vehicles and related components and infrastructure.

Advanced Manufacturing Production Credit: Provides an outline of credits available to those entities that produce materials used for clean energy production. Materials eligible for credits include the production of electrode active materials, battery cells, battery modules and applicable critical minerals. Credit phase outs do not apply to the production of critical minerals.

Advanced Technology Vehicle Manufacturing: Appropriates $3 billion for the Secretary of Energy to make direct loans for the cost of establishing or expanding U.S. manufacturing facilities that produce advanced technology vehicles or components with low or zero greenhouse gas emissions.

Domestic Manufacturing Conversion Grants: Appropriates $2 billion for grants for electric hybrid, plug-in electric hybrid, plug-in electric drive and hydrogen fuel cell electric vehicles.

Defense Production Act Funding: Includes $500 million (available until September 2024) for additional incentives to spur onshoring for critical minerals.

Purchase Incentives

Previously Owned Vehicle Credit: Applies a tax credit for used clean vehicles at the lesser of $4,000 or 30 percent of the sale price of that vehicle. Qualifying used cars include model years at least two years earlier than the year the vehicle was purchased.

Qualified Commercial Clean Vehicles: Creates the qualified commercial clean vehicle credit, which is equal to 30 percent of the incremental cost of the vehicle not powered by an internal combustion engine with a maximum credit of $7,500 for vehicles weighing less than 14,000 pounds and $40,000 for all other vehicles.


Alternative Fuel Refueling Property Credit: Extends the federal income tax credit on the cost of any qualified alternative fuel vehicle refueling property through 2032. The credit is allowable on costs up to $100,000 of the cost of each alternative refueling property at a location.

Map of electric vehicle and battery production locations in the United States.