US electric vehicle tax breaks will expire on Sept. 30
Sweeping tax and budget legislation approved by Congress on Thursday means $7,500 tax credits for buying or leasing new electric vehicles will end on September 30, as well as a $4,000 used EV credit, that have helped juice green vehicle sales in recent years.
The Electrification Coalition, an EV advocacy group, said on Thursday "as EVs secure a growing share of the global automotive market, it is obvious that the future of transportation is electric; this bill forfeits America's role in that future to China."
Congress first approved a $7,500 EV tax credit in 2008 that it phased out after manufacturers hit 200,000 vehicles. The credit was expanded in 2022 to cover leased vehicles and the per manufacturer cap was lifted.
Separately, U.S. automakers stand to receive significant benefits from the final bill that eliminates penalties for failing to meet Corporate Average Fuel Economy shortfalls. The measure makes it easier for automakers to build gas-powered vehicles.
Barclays auto analyst Dan Levy said the tax credit phase-out in less than three months means EV sales will significantly jump via a "pre-buy" since some consumers will move up purchases planned for later with sharp declines in the
months to follow.
"We believe the bill reiterates the slowdown ahead for EV penetration in the U.S., with both the 'carrot' (i.e. tax credits/incentives) and the 'stick' (i.e. emissions regulations) softened," Levy wrote in a research note.
A Harvard University study released in March forecast that ending the EV tax credits would reduce EV penetration by 6% by 2030 and would save the government $169 billion in EV tax credits over a decade.
Last year, Chrysler parent Stellantis (STLAM.MI), opens new tab paid $190.7 million in civil penalties for failing to meet U.S. fuel economy requirements for 2019 and 2020 after paying nearly $400 million for penalties from 2016 through 2019. GM previously paid $128.2 million in penalties for 2016 and 2017.
In the final bill, Congress dropped a planned $250 annual fee for EVs to pay for road repairs, as well as a requirement that the U.S. Postal Service sell off its EV delivery vehicles.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
6 minutes ago
- The Guardian
Trump says US will send letters setting tariff rates to trading partners
Donald Trump has said that the US will start sending out letters to trading partners on Friday setting tariff rates that countries will have to pay from the beginning of next month. The US president told the media that about '10 or 12' letters would be sent out initially, with further letters sent out over the 'next few days'. His administration is expected to write to all of its trading partners without a deal in place before 9 July, the end of a 90-day pause on Trump's 'reciprocal tariffs'. 'I think by the ninth they will be fully covered,' he said, referring to the deadline the US set for countries to reach bilateral trade deals to avoid higher duties. 'They will range in value from maybe 60% or 70% tariffs to 10% and 20% tariffs.' Trump did not provide further details on which countries would get the tariffs, or whether they would be targeted at certain goods and services. The Trump administration has so far announced deals with the UK and Vietnam, and agreed a truce with China after tariffs imposed on the world's second largest economy sparked a trade war. On Thursday, Scott Bessent, the US treasury secretary, hinted that the US was close to a high-level 'framework' deal with the EU that would avert 50% tariffs on all exports from the bloc next Wednesday. Trump initially revealed his programme of global tariffs on 2 April, 'liberation day', but later announced the 90-day pause to allow countries time to negotiate. Trump put more pressure on those countries still negotiating, saying that while a 'couple' more trade deals were close to completion his 'inclination is to send a letter out and say what tariffs they are going to be paying'. He said: 'It's much easier.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Earlier this week Trump said he would not extend the 9 July deadline for deals to be struck. 'We're going to do what the president wants,' Bessent said in an interview on Thursday. 'And he'll be the one to determine whether they're negotiating in good faith.' On Thursday, Trump secured passage of his controversial flagship tax and spending bill, after the House of Representatives approved it.
Reuters
19 minutes ago
- Reuters
Trump says he expects Hamas decision in 24 hours on 'final' peace proposal
WASHINGTON, July 4 (Reuters) - U.S. President Donald Trump said on Friday it would probably be known in 24 hours whether the Palestinian militant group Hamas has agreed to accept what he has called a "final proposal" for an Israel-Hamas ceasefire in Gaza. The president also said he had spoken to Saudi Arabia about expanding the Abraham Accords, the deal on normalization of ties that his administration negotiated between Israel and some Gulf countries during his first term. Trump said on Tuesday Israel had accepted the conditions needed to finalise a 60-day ceasefire with Hamas, during which the parties will work to end the war. He was asked on Friday if Hamas had agreed to the latest ceasefire deal framework, and said: "We'll see what happens, we are going to know over the next 24 hours." A source close to Hamas said on Thursday the Islamist group sought guarantees that the new U.S.-backed ceasefire proposal would lead to the end of Israel's war in Gaza. Two Israeli officials said those details were still being worked out. Dozens of Palestinians were killed on Thursday in Israeli strikes, according to Gaza authorities. The latest bloodshed in the decades-old Israeli-Palestinian conflict was triggered in October 2023 when Hamas attacked Israel, killing 1,200 and taking about 250 hostages, Israeli tallies show. Gaza's health ministry says Israel's subsequent military assault has killed over 56,000 Palestinians. It has also caused a hunger crisis, internally displaced Gaza's entire population and prompted accusations of genocide at the International Court of Justice and of war crimes at the International Criminal Court. Israel denies the accusations. A previous two month ceasefire ended when Israeli strikes killed more than 400 Palestinians on March 18. Trump earlier this year proposed a U.S. takeover of Gaza, which was condemned globally by rights experts, the U.N. and Palestinians as a proposal of "ethnic cleansing." Trump made the comments on the Abraham Accords when asked about U.S. media reporting late on Thursday that he had met Saudi Defense Minister Prince Khalid bin Salman at the White House. "It's one of the things we talked about," Trump said. "I think a lot of people are going to be joining the Abraham accords," he added, citing the predicted expansion to the damage faced by Iran from recent U.S. and Israeli strikes. Axios reported that after the meeting with Trump, the Saudi official spoke on the phone with Abdolrahim Mousavi, chief of Iran's General Staff of the Armed Forces. Trump's meeting with the Saudi official came ahead of a visit to Washington next week by Israeli Prime Minister Benjamin Netanyahu.
The Independent
38 minutes ago
- The Independent
‘I understand what Trump cares about,' says Sir Keir Starmer
Sir Keir Starmer said he understands what Donald Trump cares about, insisting the pair have built a relationship on shared family values. The prime minister admitted that while they may have 'different political backgrounds", he and Mr Trump have built a 'good personal relationship' which he said helped land the trade deal with the US. Sir Keir revealed that the US president reached out to offer his condolences after the death of his younger brother, Nick Starmer, on Boxing Day last year. "We talked about my brother, and he was asking about him', the prime minister said. "For both of us, we really care about family and there's a point of connection there.' Speaking to BBC Radio 4's Political Thinking, Sir Keir said he first spoke to Mr Trump in his role as prime minister after he was shot at a rally in July, before he was elected as president. He said. 'I think I do understand what anchors the president, what he really cares about. But also, we have a good personal relationship. 'The first time I ever spoke to him was when I picked up the phone to him after he had been shot when he was at rally before he became president. 'And that was a phone call, really, to ask him how it was, and in particular, I wanted to know how it impacted his family.' The prime minister also denied that this week's humiliating climbdown on welfare came because he had been overly focused on foreign affairs. He said he cannot 'pretend… that wasn't a tough day', and stressed the welfare system 'isn't working for the people that matter to me'. But the PM also insisted the government would "come through this stronger". Sir Keir was forced to abandon a key plank of his controversial benefit cuts on Tuesday in order to get them through parliament in the face of a mass rebellion of Labour MPs. While his welfare reform bill passed its second reading by 335 votes to 260 – a majority of 75 – the prime minister still suffered the largest rebellion of his premiership so far, with 49 Labour MPs voting to reject the legislation. It came after a last-ditch announcement that plans to restrict eligibility for personal independence payments (PIP) – which had been the central pillar of the government's reforms – were being dropped in a humiliating climb down for the prime minister. The rebellion was a sign of growing disaffection among Labour MPs, with mounting concern over Sir Keir's leadership and the direction of the government. The prime minister said he will always 'carry the can' as leader, adding he would 'always take responsibility' when asked questions. 'When things go well… the leader gets the plaudits, but when things don't go well, it is really important that the leader carries the can – and that's what I will always do,' he said.
