President Donald Trump’s One, Big, Beautiful Bill Act is set to move to the House after passing the Senate with altered provisions. The bill aims to increase spending in areas like defense and border security, targeting health care and nutrition programs like Medicaid and SNAP. However, it also threatens the federal electric vehicle tax credit of $7,500.
If passed, this tax credit would be phased out, eliminating the incentive for American car buyers. This could have a disastrous impact on the automotive industry, including job losses and decreased profits for automakers. The tax credit allows buyers to claim up to $7,500 for qualifying new electric vehicle purchases, making EVs more affordable.
The loss of this incentive would disproportionately affect Tesla, which is currently the market leader in the US EV space. However, it could also level the playing field for rivals from Hyundai Motor Company and General Motors’ portfolio of brands. The elimination of the tax credit would ultimately make buying electric vehicles more expensive for car buyers.
Automakers have already invested billions into new electric vehicle production, and a sudden loss of this incentive could lead to significant losses on these investments. Key stakeholders like CarMax and Carvana are urging the US Senate to slow down the elimination of the tax credit rather than swift elimination.
The potential outcomes of losing the EV tax credit include lower EV sales numbers, reduced profits for automakers, auto industry job losses, and decreased competitiveness in international sales.
Source: https://eu.usatoday.com/story/cars/news/2025/07/02/trump-bill-impact-ev-credit-car-buyers-industry/84444184007