Tax credits for electric vehicle charging will be available in much of the country

The Biden administration on Friday issued guidance making much of the country eligible for tax breaks intended to offset the cost of installing electric vehicle chargers.

Consumers and businesses can claim the credit for charging equipment installed at homes or business premises for public or private use. The initiative aims to make it more affordable for Americans to deploy electric vehicle chargers, which will need to be widely available across the United States to meet the Biden administration's goal of electric vehicles account for half of new car sales in 2030.

Before Friday's guidance, it was unclear which areas could qualify for the tax break. Eligible chargers had to be located in low-income or non-metropolitan areas, but it was not clear how many locations would fall under these categories.

The Ministry of Finance has chosen to include a wide range of locations, covering a large part of the country outside the major cities. Qualified areas cover approximately two-thirds of the US populationTreasury Department spokeswoman Ashley Schapitl said in a statement.

Wally Adeyemo, the Deputy Finance Minister, pointed to the growth in electric vehicle sales last year and said the government expected the new guidelines to promote more progress this year.

“Additional clarity around the law's incentive to build new charging infrastructure in communities that need it most will help ensure further progress is made in 2024,” Mr Adeyemo said in a statement.

Individuals and businesses purchasing chargers or other eligible fueling equipment can do so receive credit up to 30 percent of the installation costs.

Clean energy advocates say the broader availability of tax credits would speed up the installation of chargers across the country, helping to drive broader adoption of electric vehicles. Sales of such vehicles have grown faster than those of any other major car category, but demand has not grown as much as expected. That has prompted some automakers to scale back production.

The Biden administration is trying to entice consumers to buy electric vehicles by offering tax breaks of up to $7,500 per vehicle. The federal government is also spending billions of dollars to build a national network of reliable, fast chargers, but the rollout has been slow.

Luke Tonachel, senior director at the Natural Resources Defense Council, said more clarity on eligible locations could have accelerated the rollout of charging infrastructure last year, and there were concerns that federal officials would not make the credit widely available. But he said the new guidelines now would help speed up the installation of more chargers.

“I would expect that with this clarity, there will be more investment in charging by both businesses and consumers, knowing that it is now available,” Mr Tonachel said.

Albert Gore III, executive director of the Zero Emission Transportation Association, an industry group, said the new guidelines were a “positive step” that would help attract more investment in rural and lower-income communities.

“It will significantly increase the availability of public charging options,” Mr Gore said. “We are very happy to see where the guidance has ended up.”