Yahoo Autos Incoming Trump Administration Reportedly Aiming to Axe EV Tax Credits
President-elect Donald Trump’s transition team is reportedly working on eliminating the $7500 tax credit for consumers that's tied to the purchase or lease of an electric vehicle, as part of the upcoming administration’s revised approach to tax reform legislation. News of the tax shakeup comes by way of a report from Reuters, who spoke with two sources with direct knowledge on the Trump team’s future plans.
Trump campaigned on eliminating the Biden administration’s “EV mandates.” The tax credits were as a fundamental part of the Inflation Reduction Act (IRA), arguably President Biden’s most impactful piece of legislation. Ending or significantly reducing the federal incentives tied to EV purchasing could have massive effects on the electric vehicle market here in the States, which is already showing signs of slower growth than previously expected.
That said, not everyone in the American EV business is concerned about such an effort from the Trump team. According to Reuters, two separate representatives from Tesla speaking under the condition of anonymity confirmed CEO Elon Musk and the electric car brand’s support for the move. Tesla is by far the nation’s largest EV producer, and Musk himself a keen ally of the president-elect; just this week, Musk was named chairperson of a new outside advisory commission being constructed under the Trump Administration called the Department of Government Efficiency, or DOGE — the acronym also being the name of a cryptocurrency Musk has supported.
Musk claimed back in July that eliminating the EV tax credits would hurt Tesla, but that the impacts would be “devastating” to Elon’s competitors like Ford, GM, and Hyundai.
The Trump team sees the EV tax credits as an easier target than other parts of the IRA, which has proved successful at bringing in money in Republican-dominated states. The savings from said program could also be used to fund an extension of Trump’s previous tax cuts, which are set to expire soon. Tax legislation is expected to be one of the earlier priorities for the Republicans once Trump lands in office next year.
Trump’s energy-policy transition team is responsible for this particular proposal. The group is led by Harlod Hamm, billionaire oil magnate and founder of Continental Resources. North Dakota Governor Doug Burgum is also leading the team, according to the aforementioned sources within the upcoming administration. The group has been meeting routinely since November 5, spending time at Trump’s Mar-a-Lago resort in Florida; Musk has also been reported to be spending a large amount of time at Mar-a-Lago following Trump's victory.
U.S. energy secretary Jennifer Granholm said on Friday that the U.S. auto industry will become less competitive if the next administration eliminates the current tax credit setup. Granholm is no stranger to the challenges involved in legislating the auto industry, having served as the governor of Michigan from 2003-2010. That sentiment mirrors the words of The Alliance for Automotive Innovation, which sent a letter to Congress back on October 15. That letter states that the continued tax credits will be necessary for the US to cement its place in the global EV market.
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