Electric vehicle (EV) adoption is fast-growing. It’s predicted that there will be 74 EV models in North America by 2025, and by 2029 EVs could account for as much as a third of the North American market.
The increased demand for EVs is lowering emissions and reducing fuel costs. But it's also exacerbating the industry’s existing supply chain challenges, including component and raw materials shortages, high production costs, shipping delays, and inefficient production processes.
What steps can U.S. automakers take to address these challenges?
Onshoring and Reshoring Initiatives: The Inflation Reduction Act offers automakers a tax break of up to $7,500 per EV sale, so long as 40% of the value of its critical materials is sourced or processed in the U.S. or a nation with which the U.S. has a free trade agreement.
Starting in 2024, that percentage will increase each year, providing additional incentives for automakers to reshore or onshore their operations.
Source: Thomas Engineering