Senate Republicans seek to kill US$7,500 EV tax credit
WASHINGTON: US Senate Republicans on Monday proposed a tax and budget bill that would end the US$7,500 tax credit on new electric vehicle sales 180 days after the measure is signed into law and immediately end the credit for leased EVs made outside North America.
Republicans have taken aim at EVs on a number of fronts, a u-turn from former President Joe Biden's policy that encouraged electric vehicles and renewable energy to fight climate change and reduce emissions.
The Republican Senate Finance Committee proposal would also end a US$4,000 used-vehicle EV tax credit 90 days after the bill's approval.
The Senate Republicans propose to end, effective June 16, the US$7,500 credit for leased vehicles that would also not meet the purchasing credit. Currently leased vehicles qualify without any restrictions on content or where they were assembled.
Leased vehicles could still get the tax credit for 180 more days after passage of the measure if they meet the same
stringent North American assembly, battery and
critical mineral content rules as purchased vehicles.
The House of Representatives version would allow the US$7,500 new-EV tax credit to continue through the end of 2025, and through the end of 2026 for automakers that have not yet sold 200,000 EVs before killing it.
The Republican Senate proposal would exempt interest paid on auto loans from taxes for new cars made in the US through 2028, but phases it out for individual taxpayers making more than US$100,000 annually.
The House bill would impose a new US$250 annual fee on EVs for road repair costs and US$100 for hybrid vehicles. The House bill would phase out EV battery production tax credits in 2028.
President Donald Trump last week signed a resolution approved by Congress to bar California's landmark plan to end the sale of gasoline-only vehicles by 2035, which has been adopted by 11 other states representing a third of the US auto market.
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