Lawmakers weigh ending EV tax credits in Trump’s budget bill

Lawmakers weigh to end to EV tax credits in Trump’s budget bill

The House Rules Committee began meeting early Tuesday morning to discuss President Trump’s sweeping budget proposal, which includes a controversial provision: the elimination of several federal tax credits for electric vehicle owners.

PLEASANTON, Calif. - The House Rules Committee began meeting early Tuesday morning to discuss President Trump’s sweeping budget proposal, which includes a controversial provision: the elimination of several federal tax credits for electric vehicle owners.

Among the credits on the chopping block is a $7,500 incentive for buyers of new EVs — the most widely used of the current programs. 

That credit was originally set to remain in place until 2032. Under the president’s proposal, it could end later this year.

"There’s no secret the GOP and President Trump haven’t been strong supporters of the EV tax credit," said Parag Amin, a business attorney and industry analyst.

Some analysts warn the removal of these incentives could significantly impact the EV market.

"Ultimately, we’re probably going to see EV sales drop by 25 percent — by some estimates, even as much as 40 percent," Amin said.

Despite that, many EV owners remain committed to their vehicles.

"Yes, I’d still buy an electric car, even without the credit," said Sonia Vidal of Pleasanton. "Just because of gas prices — it makes more sense economically."

Vidal said she now pays about $15 a week to charge her EV, compared to the $400 she used to spend on gasoline.

The EV market faces additional pressures beyond the potential tax credit cuts, including inflation and rising tariffs.

"There’s a time of economic uncertainty," Amin said. "So people may end up holding off altogether on buying a new vehicle — certainly an electric one — which, if this bill passes, is going to be significantly more expensive."

Not all incentives would be eliminated under the current proposal. 

A $4,000 federal tax credit would still be available for new EVs purchased from smaller manufacturers — those producing fewer than 200,000 vehicles per year.

That exemption would not apply to larger automakers like Tesla, Ford or General Motors, but would include companies such as Rivian, Polestar and Lucid Motors.