The US government has taken a major step back from supporting electric vehicles (EVs), with the Republican-controlled Congress passing a budget reconciliation bill that would dismantle incentives introduced by the Biden administration to boost EV sales. The move has sent shockwaves through the auto industry, which had grown reliant on federal tax breaks for vehicle purchases and battery factories.
The Senate voted to kill California’s waiver, allowing the state to require automakers to produce more EVs than customers are currently buying. Meanwhile, the House passed a bill that would methodically eliminate incentives for EV batteries and charging stations.
Industry experts say the Republican approach undermines efforts to build robust access to critical minerals needed for battery production. “It could be one of the programs that brings a crazy battle between the executive branch and what powers it has,” said Loren McDonald, an analyst for the EV data consultancy Paren.
The move comes as America’s EV sales decline for the first time last month, according to Cox Automotive. Automakers had expected interest in EVs to rebound as batteries get cheaper and charging stations become more common.
However, with the House bill’s rollbacks of incentives, automakers may struggle to justify their investments in EV production. “Big U-turn” is how Jean Chemnick describes the Republican shift from supporting climate-friendly technology.
Despite the setback, California immediately challenged the Senate’s reversal of its waiver, and the Senate has some Republicans who object to voiding EV subsidies, which could forestall new battery and automaking jobs back home.
The House bill also contains a provision that would forbid Chinese content in EV batteries, a departure from the Biden approach to require less Chinese content each year. Climate advocates are pinning their hopes on the Senate to make changes to the bill.
This isn’t the end of the road for electric vehicles in the US, but the Republican shift from supporting climate-friendly technology is a significant development in the ongoing battle over EV incentives.
Source: https://www.politico.com/newsletters/power-switch/2025/05/23/republicans-try-to-unplug-the-ev-era-00367077