The incoming Trump administration will prioritize ending the $7,500 EV tax credit, a move supported by Tesla, Reuters reported Thursday.
Nixing the EV tax credit is being discussed by Trump's transition team as part of a broader tax bill, according to the report, which identified two people with knowledge of the matter. The transition team looks at the removing the EV tax credit as a simple goal that will get easy approval in the Republican-controlled Congress, the report said, while noting that the administration needs spending savings to pay for billions of dollars in tax cuts that will expire at the beginning of Trump's term.
2025 Nissan Leaf
The two sources also told Reuters that Tesla representatives told Trump's transition committee that they support eliminating the tax credit. Tesla is the biggest US EV brand, but the automaker is likely making a bet that ending the tax credit will have a big impact on its less established competitors in the EV market. It also keeps Tesla CEO Elon Musk—an ardent Trump supporter—on the same page as the President-elect.
Under the Biden administration, the EV tax credit was renewed under the IRA of 2022. immediate sales discount as early as 2024, but also added more restrictions on which vehicles qualify. Related to origin of battery components and essential mineralsin addition to the North American consolidation requirements and the amount and amount of revenues previously classified.
2025 Lucid Air Pure
Considering those sourcing requirements, the purchase loan depends on the paperwork and few productions, too. That has led to some US-made models, such as the Nissan Leaf, flowing in and out of stock.
The worst part of the tax credit may be the so-called “lease loophole,” which applies. $7,500 on leased EVs regardless of manufacturer or sticker price. Democrats reportedly did not touch the current session of Congress at the risk of bringing all the credits back up for a vote.