GOP tax bill calls to end electric vehicle tax credit early

GOP tax bill calls to end electric vehicle tax credit early

The U.S. electric vehicle (EV) tax credit, which has been a significant driver of EV adoption, is under threat as part of broader spending cuts proposed by House Republicans. House Speaker Mike Johnson recently indicated that the EV tax credit is more likely to be eliminated than preserved, stating, "I think there is a better chance we kill it than save it" [1].

The move aligns with broader Republican efforts to reduce spending and offset revenue losses anticipated from President Trump’s tax cuts. The EV tax credit, which offers up to $7,500 for EV buyers and covers both used and commercial vehicles, could cost upwards of $200 billion over 10 years, according to an analysis by Capital Alpha Partners [1].

Automakers, including General Motors, have heavily relied on the tax credit to boost EV sales. However, with the current administration favoring fossil fuels, the credit is expected to be repealed. Republicans are also considering nullifying California’s planned 2035 ban on new gasoline-powered vehicles and overhauling clean energy tax incentives [1].

The proposed elimination of the EV tax credit could have significant implications for the U.S. clean transportation policy and the market competitiveness of electric vehicles. Legacy automakers are investing heavily in domestic battery plants and electric drivetrain production, and the removal of the tax credit could affect their affordability and market positioning.

Despite the proposed cuts, 38 House Republicans have expressed support for certain clean energy provisions, with 26 urging the preservation of tax incentives for nuclear and clean electricity generation [1].

The future of the EV tax credit remains uncertain, but the proposed elimination underscores the broader political and economic shifts in U.S. energy policy.

References:
[1] https://gmauthority.com/blog/2025/05/u-s-ev-tax-credit-may-be-eliminated-soon/