Report: The Trump Administration Plans on Killing the EV Tax Credit

• Reuters reports that President-elect Trump will kill the EV tax incentive.
• That means that you won't be able to take $7,500 off the purchase price of your EV anymore.
• The time to buy an EV might be right now.

A report from Reuters says that President-Elect Donald Trump's administration plans on killing the federal EV tax incentive. The $7,500 or $3,750 credit — which you can read all about here — was a major part of President Joe Biden's Inflation Reduction Act. The policy put forth by the Biden administration was in direct opposition to Trump's campaign promises to boost American oil production and reduce subsidies for other power sources like wind and solar. 

Reuters also reports that representatives from Tesla, the country's largest EV maker, are in support of repealing the subsidy. Tesla chief executive Elon Musk believes that, while the subsidy may hurt Tesla sales in the near term, the effects on competitors (like Ford and General Motors) would be far more significant. Thanks to Tesla's established dominance in the EV space, it's easy to see why the company would take a bullish stance on the end of the EV incentive. Getting rid of the incentive makes it more difficult for competitors already experiencing difficulty moving their EVs to improve their position and increases the barrier to entering the segment for prospective new automakers.

The EV transition has swung back and forth, but recently attractive lease deals and the tax incentive have buoyed EV sales. Throw in many automakers' adoption of the Tesla NACS charge port, the rapid growth of the Tesla Supercharger network, and the introduction of cheaper EVs from legacy manufacturers like the Chevrolet Equinox EV and the outlook for EVs after Q3 2024 was positive. The end of the EV tax credit could have a major impact on Americans' adoption of electric cars and the previous administration's quest to cut overall emissions.

What this means for you

Trump says he wants to cut $2 trillion from the federal budget while also making tax cuts, and EV incentive is an easy target for his administration and the incoming Republican-controlled Congress. If you want to get your hands on a cheap EV and save $7,500 on a lease deal, the time to act is right now. Securing the incentive on the aforementioned Equinox EV, upcoming Volvo EX30, Hyundai Kona Electric or less expensive Teslas now makes sense because the incentive accounts for a bigger portion of the overall purchase price.