by Tax incentives for electric vehicles may disappear soon
Federal tax incentives for electric vehicles may be canceled earlier than expected. Senators propose terminating the $7,500 tax credit for new electric vehicles as early as September 30, 2025.
If the bill is passed, the cost of electric vehicles could increase sharply. The changes also affect the $4,000 credit for used electric vehicles, which may also be canceled.
Accelerated timeline for changes
As previously reported, the initial draft law provided for the cancellation of the tax credit, but now senators want to do this within 180 days after the law is passed.
A final decision could be made as early as July 4, and the incentives themselves would disappear by the end of September. This creates pressure on manufacturers and dealers who already have large inventories of electric vehicles.
Consequences for automakers
Canceling the incentives could reduce demand for electric vehicles, although the bill also proposes canceling penalties for non-compliance with environmental standards. This could partially compensate for manufacturers’ losses.
Dealers’ reaction
“Dealers have about 140,000 electric vehicles in inventory. If incentives are canceled, a transition period is needed,” stated the National Automobile Dealers Association.
A final decision has not yet been made, but it seems likely that the incentives will disappear by the end of 2025. Those planning to purchase an electric vehicle should hurry.
The issue of environmental incentives remains controversial – on one hand, they stimulated the transition to “clean” vehicles, but on the other hand, their cancellation could slow down market development. Manufacturers will have to find new ways to attract buyers without financial support from the government.
