President Biden in August signed into law the Inflation Reduction Act. Despite the law’s name, even the Congressional Budget Office estimates it will have a “negligible effect” on inflation this year.

While the act won’t do much to lower inflation, it will have a huge impact on transportation and clean energy. At the same time, the technology behind flying cars is coming to fruition. Let’s take a look at the investment ramifications of this transportation revolution.

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The Inflation Reduction Act aims to reduce carbon emissions by offering numerous clean energy tax credits and financial incentives and to make access to clean energy products more affordable for average Americans.

Consumers will get rebates and tax credits for items such as energy-efficient home appliances, rooftop solar installations, and electric vehicles (EVs).

Specifically, consumers will receive up to a $7,500 tax credit for buying a new EV and $4,000 for buying a used one. Traditional vehicles powered by combustion engines are the biggest source of carbon emissions in the U.S., so it’s no surprise that the new legislation seeks to encourage more Americans to go electric.

Analysts estimate that by 2040 the vast majority of new cars sold will be EVs. It will be a massive undertaking to make that vision a reality. From the incredible amounts of natural resources needed to build the EVs and batteries, to charging stations and electric grid upgrades, it won’t be an easy task. Nevertheless, regulators are supportive of the clean energy transition and our country is trending that way.

City Traffic Gridlock

In heavy population centers, such as New York City, where I live, policymakers have tried other ways to reduce vehicle emissions. New York has long had bike-share programs and added bike lanes to encourage New Yorkers to travel by bicycle. Lately, the city is considering enacting tolls on drivers who drive into certain parts of Manhattan. These programs are far from perfect and often cause congestion.

Not Science Fiction Anymore

Besides frustrations for drivers, congestion also leads to inefficient driving, greater fuel consumption, and more carbon emissions released, as engines continue to run even though the cars are barely moving. This is a huge problem that plagues major cities, but relief could be on the way.

One seemingly fantastical but increasingly realistic solution is air taxis. Passengers riding in for-hire vehicles soaring through the air was once science fiction, but the technology is now being tested in multiple countries in the world. Both automated (still requiring human intervention) and autonomous air taxis are being tested. They will be electric.

United Airlines (NSDQ: UAL) made news last week by investing in a startup air taxi manufacturer. The airline company is buying 200 units of eVTOLs (electric vertical takeoff and landing aircraft) to start, with an option to buy 200 more.

The taxis will be used to transport passengers to the airport, bypassing the ground-based traffic. United thinks the first trip will be possible by 2026. Current plans call for fares of $100 or more per passenger. This is actually United’s second eVTOL order. Previously it had ordered 200 units from another company.

Earlier, in July, American Airlines (NSDQ: AAL) pre-ordered 250 units of flying taxis, with an option for 50 more, from a UK company. The models ordered, also electric, can carry four passengers and travel at up to 100 mph. Numerous other airline companies around the world have made similar investments.

To be clear, the Federal Aviation Administration has yet to approve air taxis to transport passengers, but the fact that major airlines are willing to spend millions of dollars to preorder them suggests that the technology is viable.

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