US Senators have proposed killing the country’s $7,500 electric vehicle (EV) tax credit and imposing a new $1,000 tax on EVs to pay for road repairs. The move is expected to affect Detroit automakers that have invested billions of dollars in EV production.
The proposal includes repealing the tax credit for new EVs, ending the federal investment tax credit for EV charging stations, and killing credits for leased EVs. The credits would expire 30 days after the bill was signed into law.
Senator Deb Fischer has proposed a one-time $1,000 fee charged at the time of purchase, which would be equivalent to what drivers of conventional vehicles pay in federal gas taxes over 10 years for highway funds. This fee aims to account for the wear and tear on roads caused by EVs, which can weigh up to three times as much as gas-powered cars.
The proposal comes amid concerns about road repair costs, which have been increasing due to rising demand for EVs. In recent years, more than $275 billion has been shifted from the general fund to pay for these repairs. The Trump administration has also frozen EV charging funds and is moving to rescind aggressive emissions rules that would require automakers to build more EVs.
The proposal is part of a broader effort to address the increasing costs associated with road repairs, which are largely funded through diesel and gasoline taxes. While some states charge fees for electric vehicles to cover road repair costs, Congress has historically opted not to hike fuel taxes to pay for these expenses.
Source: https://www.reuters.com/business/autos-transportation/republican-senators-call-1000-tax-new-ev-sales-pay-road-repairs-2025-02-12