The Senate passed President Trump’s sweeping economic “Big, Beautiful Bill” Tuesday—practically sealing the fate of the federal EV tax credits and likely several other initiatives tied to electric vehicles.
The details: The massive tax and spending legislation (which still needs to pass the House before it makes its way to the President) would nix two federal incentives that have been instrumental in drawing car buyers to EVs.
The legislation—known as the “Big Beautiful Bill”—would eliminate the $7,500 tax credit for the purchase or lease of a new electric vehicle, and the $4,000 credit for the purchase of a used EV after September 30.
An initial version of the bill passed by the House allowed for a bit more leeway on the federal EV credits—ending them on December 31, with some electric vehicles exempted from that deadline.
Why it matters: The Senate’s version of the bill gives car buyers three months to reap the advantages of the federal EV tax credit and puts dealers on a tighter clock to be able to leverage the subsidy to move existing EV inventory.
Between the lines: It seems certain that the bill will have to undergo some modifications before it makes its way to the President’s desk. However, it’s highly unlikely that the end date for the federal EV tax credits will be a sticking point to get the bill passed in the Republican-controlled House at this point.
In general, Republicans in the House and Senate have opposed EV mandates—with many contending that EV sales should be dictated by market demand, not federal initiatives.
President Trump has set the tone for the Republicans' strong opposition to EV measures like the federal tax credits—with the rollback of such initiatives being a key part of his reelection campaign.
What they’re saying: “If you’re interested in driving an EV — either new, used or leased — now is the time to act. This is going to be the summer of the EV, because come the end of September those credits will be gone,” said Ingrid Malmgren, senior policy director at Plug In America (via CNBC).
Bottom line: The elimination of federal EV tax credits will uproot every facet of the EV sector short-term and long-term—requiring stakeholders to make drastic adjustments to their business strategies regarding electric vehicles, many of which are probably already underway.
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