Trump's 'Big, Beautiful Bill' would kill tax incentive that's powered EV sales. What to know
Trump's 'Big, Beautiful Bill' would kill tax incentive that's powered EV sales. What to know Could this be the end of affordable electric vehicles in America?
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Lawmakers return to hammer out details on Trump's 'big beautiful bill'
Lawmakers returned from break to hammer out the details of President Donald Trump's legislative agenda.
'Big, Beautiful Bill' includes tax cuts, reduced Medicaid and SNAP spending.
Tax bill also proposes completely eliminating the Obama administration's federal electric vehicle tax incentive.
Eliminating the EV tax credit could make some of the most popular electric cars less desirable to consumers.
President Donald Trump's 'Big, Beautiful Bill' spans 1,116 pages. Some of those pages include serious cuts to clean energy incentives in a number of sectors such as transportation.
In an effort to reduce emissions produced by gas-powered vehicles, the federal government began to offer Americans an electric vehicle tax credit of up to $7,500 during the Obama administration. This made pricey electric vehicles more affordable and accessible to average American drivers. Among Trump's and House Republicans' 'Big, Beautiful Bill' proposals is a measure to kill the tax credit over the next few years.
President Donald Trump's 'Big, Beautiful Bill' takes aim at EV tax credit
Section 112002 on page 30 of the One Big, Beautiful Bill document is titled "Termination of clean vehicle credit." The credit was originally set to expire December 21, 2032. A provision in the bill "accelerates the expiration to December 31, 2025." Americans would lose the ability to claim the EV tax credit in 2026.
The bill also targets EV and hybrid vehicle owners, under a proposal from the House Transportation and Infrastructure Committee that calls for annual fees, according to MarketWatch. Electric vehicle owners could be charged $250 annually and hybrid owners could be charged $100 annually if the bill is passed. So, why the attack on electric vehicles and what does this mean for car buyers?
Why the federal electric vehicle tax credit is under attack
The President has been taking aim at EVs for years and openly expressed his disdain for former President Biden's mandate demanding automakers electrify a large percentage of their portfolios by 2030. Trump has said that Biden's , electric vehicle mandate would cause 40% of all U.S. auto jobs to disappear, a statement which FactCheck.org, a non-profit research website, found no evidence to back up.
President Trump is not an electric vehicle advocate, despite his proximity to Tesla CEO and Senior Advisor Elon Musk. Instead, the President is a huge supporter of the oil and gas industry. His pledge to "drill, baby, drill" was one of the major talking points during his campaign trail.
What an EV tax credit elimination means for American drivers
If the 'Big, Beautiful Bill' eventually gets passed it could be the end of an era for American car buyers who strategically used the tax credit to purchase vehicles. The tax credit made popular electric vehicles like the Tesla Model Y affordable for many drivers. Eliminating it could severely impact EV sales across the industry.
If EVs are suddenly less affordable, they could become less desirable to many consumers. The Chevrolet Equinox EV is $26,100 with the tax incentive. Remove the incentive and its starting price is $33,600 before taxes and additional fees.
The Ford F-150 Lightning electric pickup truck starts at $55,495 before taxes and fees with the EV tax credit. Without the incentive, its price is $62,995. The existence of the tax credit is a huge selling-point for many popular EVs. The passage of the bill as is would mean electric vehicles are about to get much more expensive.
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