Will Electric Vehicle Demand Drop After Tax Credits Expire?

The state of Georgia may help to uncover some of the economics that surround how the electric vehicle market will react after the federal tax credit fades away, by providing a natural experiment in tax credit incentives. Georgia had an aggressive state-level tax credit, similar to the U.S. federal tax credit, offering up to a $5,000 incentive to purchase an EV. The combination of federal and state incentives was effective; at its peak, 4% of Georgia’s vehicle fleet was EVs.