The newly passed Inflation Reduction Act includes a new electric vehicle tax incentive aimed at making electric vehicles more affordable while also benefiting the environment.
The new EV tax credit amends one already on the books called the Qualified Plug-in Electric Drive Motor Vehicle Credit, also known as the "Clean Vehicle Credit."
The main difference in the new tax credit is that it now requires final assembly of the electric vehicle to be completed here in the U.S.
Under the old program, buyers got $2,500 to start and could get more depending on the efficiency of the battery in the car.
Under the new tax credit, EV buyers can get up to $7,500 for new vehicles and up to $4,000 for used.
Phoenix Mayor, Kate Gallego sees the new EV tax credit as a win for the environment and the city.
"Right now, Arizona is number three in electric vehicle adoption which means we are leaders in the area. We are also leaders in manufacturing and the developing of electric vehicles. We're being called 'The Electric Valley' or 'New Motor City' because of the concentration of EV jobs in our community. So, this is good news all around," Gallego said.
"Once you drive an electric vehicle, most people fall in love. And it's good for the economy because of the jobs that are created," she added.
She also hopes replacing the city gas fleet with electric will help to improve the area's poor air quality.
"No tailpipe emissions associated with an EV is good news for anyone breathing in our community," she said.
On the flip side, not one Republican voted for the Inflation Reduction Act.
Congressman David Schweikert is a senior member of the ways and means committee, and the senior Republican on joint economic committee. Schweikert says just like the old Clean Vehicle Credit, the new EV tax credit is just more Democratic subsidy over healthy competition and will backfire when it comes to manufacturers and EV prices.
"It actually raised the price on electric vehicles," Schweikert said about what happened when the Clean Vehicle Credit was implemented. "We think we're going to see the exact same thing but maybe even more distorted."
Another major issue is infrastructure. Mayor Gallego says Phoenix is working hard to install more EV charging stations at parks, libraries and major driving hubs.
"Such as I-10 and I-17 so we should see more public charging infrastructure in that area," Gallego said.
Schweikert says the nation's power grid isn't nearly ready.
"Our grid across the country cannot hold. It cannot produce enough electricity. We don't actually have the generation capacity," he said.
Gallego says Phoenix is still pushing forward with initiatives like providing more electric rentals out of Sky Harbor Airport. The benefits of electric, she says, still outweigh some of the challenges and Arizona is ready lead the way into an all-electric future.
"Wouldn't you love it if people had a great experience driving Lucid out of sky Harbor Airport and bought one when they got home," she said.
Instead of rushing full throttle on electric, Schweikert says we need to pump the breaks.
"The legislation is actually really poorly designed," he said. "They're subsidizing this industry... and that industry."
"It’s the classic Republican vs Democrat battle. Do you hand people money, or do you actually create more competition?" Schweikert said.
