Republicans Propose to Cancel Tax Incentives for Electric Vehicles
The U.S. government may soon limit support for electric vehicle buyers. The proposed “One Big Beautiful Bill Act” provides for the cancellation of the $7,500 tax credit. Although the Senate still has several months to consider it, Republicans have already prepared a separate tax plan that could accelerate the cancellation of benefits.
If the law is passed, the credit for new electric vehicles will disappear within 180 days. It is also proposed to immediately cancel benefits for leased foreign-made cars. For used electric vehicles, the $4,000 benefit will cease to be effective 90 days after the law is approved.
Accelerated Phase-Out of Incentives
According to the bill, the tax credit for electric vehicles will be completely canceled by 2026—6 years earlier than the Biden administration planned. Most manufacturers will lose the right to the credit by the end of this year, since starting in 2026, only companies that have sold fewer than 200,000 electric vehicles in the U.S. will be able to receive it.
It is also proposed to cancel incentives for used electric vehicles by the end of 2025. However, before final approval, the Senate may make changes to the bill.
Restrictions for Leased Vehicles
The new bill also provides for the cancellation of the $7,500 credit for leased electric vehicles. Currently, this benefit is available without restrictions regarding the country of manufacture, but after the law is approved, it will remain only for cars produced in North America, and even then only for 180 days.
It is obvious that Republicans are actively working to terminate support for electric vehicles, so buyers counting on tax incentives should hurry. Given the political differences between the parties, the future of the bill remains uncertain, especially in light of the upcoming elections. Some experts believe that such abrupt changes could slow down the transition to electric vehicles in the U.S.