The newly passed legislation will terminate the USD 7,500 tax credits for new EVs and USD 4,000 credits for used EVs by 30 September 2025.
The US Congress approved the ‘One Big Beautiful Bill’ on 3 July 2024, which ends the USD $7,500 tax credits for new electric vehicles (EVs) and USD 4,000 credits for used EVs on 30 September 2025, along with other provisions.
The House of Representatives narrowly approved President Donald Trump’s tax-cut legislation on 3 July 2024, after the Senate passed it on 1 July 2024.
This legislation extends his 2017 tax cuts and makes them permanent, introduces new tax breaks, cuts health and food safety net programs, and, most notably, eliminates green energy incentives. It also potentially eliminates tax credits for wind and solar energy established in 2005 and expedites the abolition of clean energy manufacturing tax credits.
The EV tax credits have boosted EV sales since their introduction in 2008 and expansion in 2022. The bill also benefits automakers by removing penalties for failing Corporate Average Fuel Economy standards, making it easier to produce gasoline vehicles.
A Harvard study predicts the end of EV credits will reduce EV adoption by 6% by 2030, but will save the federal government USD 169 billion over a decade.
The Congress also dropped a proposed USD 250 annual EV fee for road repairs and a requirement for the US Postal Service to sell its EV delivery vehicles.
