Enlarge / Democratic Senators Joe Manchin (L) and Debbie Stabenow (R) don't exactly see eye to eye on the auto industry's transition to electric vehicles. (credit: Tom Williams/CQ-Roll Call, Inc via Getty Images)

The new and somewhat-complicated rules governing which cars do or don't qualify for the new clean vehicle tax credit look like they might get tweaked a little in the near future.

Before, the tax credit was linked to the battery-storage capacity of a plug-in hybrid or battery-electric vehicle. But the Inflation Reduction Act changed that— now a range of conditions must be met , including final assembly in North America and an annually increasing percentage of locally sourced minerals and components within that battery pack.

On the one hand, the domestic sourcing requirements are beneficial because they are stimulating the development of local battery mineral refining and manufacturing here in the United States, adding well-paying jobs in the process. But the new rules have also significantly reduced the number of EVs that qualify.

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Pity the poor car dealers. After making record profits in the wake of the pandemic and the collapse of just-in-time inventory chains, they're now complaining that selling electric vehicles is too hard. Almost 4,000 dealers from around the United States have sent an open letter to President Joe Biden calling for the government to slow down its plan to increase EV adoption between now and 2032 .

Despite our robust economy, the US trails both Europe and China in terms of EV adoption. More and more car buyers are opting to go fully electric each year, although even a record 2023 will fail to see EV uptake reach double-digit percentages.

Mindful of the fact that transportation accounts for the largest segment of US carbon emissions and that our car-centric society encourages driving, the US Department of Energy published a proposed rule in April that would alter the way the government calculates each automaker's corporate average fuel efficiency. If adopted, the new rule would require OEMs to sell many more EVs to avoid large fines. This is in addition to an earlier goal from the White House that calls for one in two new cars sold in 2030 to be EVs.

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For such a car-centric nation, it's a little depressing that the US lags behind the European Union and China when it comes to electric vehicle adoption. Without a large investment to redesign our towns and cities to make them walkable and accessible via public transport, switching en masse to electric cars is the main remaining avenue left to decarbonize our transport, after all. So it is rather encouraging to see signs that more US car buyers are opting to go electric, as sales have climbed 50 percent, year on year, as uptake reaches almost 8 percent.

According to Kelly Blue Book , US car buyers bought 313,086 battery EVs between the months of July and September 2023, compared to just 209,030 BEVs for the same three months of last year. Add in the 882 Toyota Mirai hydrogen fuel cell EVs and 68 Hyundai Nexo FCEVs that found homes in Q3 2023 and that's a 50.1 percent increase, year on year.

The cumulative totals for all of 2023 so far are also looking healthy. KBB estimates that 873,082 BEVs have been bought this year, versus 586,965 for the first nine months of 2022. Add in about 2,800 FCEVs compared to around 1,000 last year, and clean vehicle sales grew 49 percent, year on year.

Enlarge / The kart places battery packs on either side of the driver. (credit: Abigail Bassett)

LONG BEACH, Calif.—Honda has its hands in all kinds of businesses, from lawnmowers and power generators to IndyCar, go-karts, and consumer vehicles. Honda Performance Division (HPD) works explicitly on the high-performance and racing product line and builds, hones, and maintains everything from the hybrid powertrain we’ve seen in Acura’s LDMh race car to high-performance kart and motorcycle engines.

With a commitment to going carbon neutral by 2050, Honda has focused its attention on moving everything in its product line toward hybrid and electric powertrains, including a brand new all-electric go-kart called the eGX Racing Kart Concept. The concept leverages Honda’s Mobile Power Pack, or MPP, and offers swappable batteries with plenty of power. We got a chance to drive the new eGX Racing Kart Concept on a small, multi-elevation track that Honda set up at the Acura Long Beach Grand Prix this month and zip around in the tiny, powerful, and quick vehicles to get a taste of the latest electric power plant from Honda.

Swappable, shareable batteries and an electric motor

The eGX Racing Kart Concept looks just like an e-kart you might see at a K1 Speed or other indoor karting track (minus the surround bumpers). It’s compact, simple, and minimal, and it can reach speeds of up to 45 miles per hour, according to Honda. It’s not Honda’s first electric kart, however, as the company built a kid's e-kart called the Minimoto Go-Kart , which ran on a rechargeable 36-volt battery and reached speeds of 18 miles per hour. Honda no longer makes or sells the Minimoto, but you can still find them on eBay and Craigslist.

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California is far and away the country's largest adopter of plug-in electric vehicles. Because of the state's ability to regulate its own air quality and spurred on by a large economy and plenty of affluent residents, the EV has gained plenty of traction in the Golden State. So much so that last month, California met its goal of having more than 1.5 million clean vehicles on the road two years ahead of schedule.

"No other state in the nation is doing as much as we are to accelerate our electric and zero emissions future," said California Governor Gavin Newsom. "California is setting the bar for climate action—and we're achieving our goals years ahead of schedule thanks to unprecedented investments secured in partnership with the legislature. We're making real progress on the world's most ambitious plan to end the tailpipe so our kids and grandkids are left with a cleaner, healthier planet."

California's Air Resources Board (CARB) began its Zero-Emission Vehicle (ZEV) program in 1990 with the intent of ameliorating the state's severe smog problem. By the early years of this century, air quality had improved to the point where CARB could begin using the ZEV regulations to help drive down climate emissions.

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By now, regular readers probably know that this year saw a major change to the Internal Revenue Service's Clean Vehicle Tax Credit, the consumer-facing incentive that aims to drive electric vehicle adoption here in the US. The tax credit was reformed by last year's Inflation Reduction Act and now places conditions on where a clean vehicle—a battery EV, a plug-in hybrid EV, or a hydrogen fuel cell EV—is manufactured, as well as the sourcing of its battery pack.

It was feared that these new rules would drastically reduce the number of eligible EVs once the sourcing requirements go into effect on April 18 , and now we can confirm that is the case. From tomorrow, only 10 new vehicles will qualify for the full $7,500. Half of the list is made up of vehicles from General Motors but also includes two models from Tesla, Ford's electric pickup truck, and plug-in hybrids belonging to Chrysler and Lincoln.

The full list of vehicles that qualify for the $7,500 clean vehicle tax credit is:

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After several years of strong growth in sales of electric vehicles, there is evidence that the supply of used EVs is starting to grow as well. Data gathered by industry analyst Cox Automotive shows a 32 percent increase in sales of used EVs through licensed car dealers to 42,753 cars for the first three months of 2023. Cox says this does not include private party sales and that used EV sales in the first quarter of this year represent twice as many as were sold in Q1 2021.

"Every new vehicle eventually becomes a used vehicle," said Jonathan Smoke, chief economist of Cox Automotive. "Our data sets indicate used EV sales will begin increasing rapidly from here, following a clear path set by new sales. In Q1, our team at Manheim [a wholesale marketplace for used cars] processed a record number of used EVs in the wholesale market. This is an approaching challenge for the industry we’ve already begun to embrace, as placing a value on a used EV is a new set of skills we all need to develop and refine."

More than 900,000 used cars went through Manheim in Q1 2023, of which 9,800 were EVs—a tiny overall percentage but an increase of 40 percent compared to Q1 2022.

Enlarge / With a starting price of $26,500, it's no surprise that Chevrolet has sold a lot of Bolt EVs this year. (credit: General Motors)

As we're now in the second quarter of the year, automakers have been reporting their sales numbers. Tesla, which we covered on Monday , is far and away the leader when it comes to electric vehicle sales in the US. But as more and more automakers are bringing new EVs to market, Tesla's market share is eroding, from 72 percent at the beginning of last year to 54 percent now— and it may fall to less than 50 percent over the next few weeks . Which of those other automakers are managing to move metal? We took a look through the Q1 sales announcements to get an idea.

While most automakers have published their Q1 2023 sales, this is not a universal list. In particular, Porsche, Mercedes-Benz, Lucid, and Genesis have yet to reveal those numbers as of April 5. And the manufacturers don't all break out data in the same way, either lumping all EVs together (looking at you, General Motors) or grouping different powertrains together (as is the case with the Kia Niro and Hyundai Kona).

It's also helpful to remember that, other than Tesla, Rivian, and Lucid, all the other automakers have product lines other than battery EVs, so such a company probably isn't going out of business next week because it only sold 3,000 EVs in three months. Supply chains still aren't back to what was considered normal pre-pandemic, and it's worth remembering that in most cases, these are global products. There are severe penalties for automakers who don't sell enough EVs in Europe and China, unlike here in the US. So in cases of finite supply, those markets will receive priority when it comes to deliveries—every EV you sell in the US is an EV you can't sell in Germany, after all.

Enlarge / A BMW worker assembles an iX battery pack at the BMW factory in Dingolfin, Germany. (credit: BMW)

Half of all new cars and light trucks sold in the US in 2030 should be zero-emissions vehicles, according to the White House's climate goals . California has set 2035 as the cutoff date for a ban on new gasoline- or diesel-powered vehicles within the state's borders. 2040 looks like the drop-dead date for new fossil fuel vehicles in some of Europe—not to mention a highly ambitious date of 2030 in the United Kingdom—and automakers on all continents are preparing all-electric lineups as they start to sunset internal combustion engine product lines.

But a survey of the auto industry conducted by ABB Robotics and Automotive Manufacturing Solutions finds some pessimism about whether those goals will be achievable. When asked if "it's realistic to shift to 100 percent electric vehicle production to meet the different regional targets from 2030 to 2040," only 11 percent said, "Yes, definitely"; fewer than 10 percent of European respondents believed the targets were realistic, compared with 12 percent in North America and 17 percent in Asia.

Another 28 percent said, "Yes, but it won't be easy." That left more than half of survey respondents believing that 2030–2040 is too soon for a move to entirely electric fleets. Forty-one percent said, "Possibly, but not by the target dates," leaving just 18 percent who could not ever see the end of the internal combustion engine.