The majority of the emissions shortfall is brought on by the energy required to produce the batteries that electric vehicles (EVs) rely on because, aside from the batteries, they are made in essentially the same way as conventional vehicles. Governments and businesses are aware of this and are making efforts to make the process a little bit greener. It’s clear what the U.S. government was attempting to accomplish with the EV tax credit program that was included in the inflation reduction act, despite the fact that it was badly implemented. The origin of the materials used in the construction of the vehicle’s batteries and the credits are now linked.
Batteries must be produced in the United States for a vehicle to be eligible for the new tax credit, and 40% of the materials used in the batteries must come from North America or a nation with which the United States has a free trade agreement. An electric sedan priced up to $55,000 or any other electric vehicle priced up to $80,000 qualifies for a tax credit of up to $7,500 if all requirements are met. Only half of that sum will be paid to the buyer if one of the conditions is met.
It is safe to assume that qualified sources will modify their operations to accommodate new orders. Some businesses, including Tesla and General Motors, are already positioned to produce batteries in the United States. Although the necessity for mining rare-earth metals for batteries may still exist, avoiding the requirement to carry materials and hefty batteries across the Pacific will reduce CO2 emissions significantly. Production of electric vehicles may soon become significantly more environmentally friendly because to developments in battery technology, supply chain initiatives, and battery recycling schemes.