The federal electric vehicle (EV) tax credit remains active due to Congress’s control over tax laws. Passed under the Inflation Reduction Act (IRA), it offers $7,500 for new EVs and $4,500 for used ones. However, with Republicans currently holding control of Congress, there is a growing likelihood they will seek to eliminate the credit within the next year. Past attempts by Trump-backed efforts have failed due to Democratic control in the Senate and White House support from President Biden.
Biden has emphasized EVs as part of his climate goals, but Republicans aim to reverse much of this progress. Their plans include new fees for EVs and eliminating a tax credit loophole for leasing them. Kathy Harris of the Natural Resources Defense Council noted that these changes could harm both the auto industry and consumers.
The auto industry appears hesitant to adapt to these regulatory shifts, which may lead to increased costs for EVs and impact the sector’s growth. The outcome will depend on how aggressive Trump and Republicans are in reversing Biden’s legacy on EVs.
Source: https://www.theverge.com/2025/1/22/24349650/trump-ev-tax-credit-tariff-congress