May 8 2025
Benoit-Charette
According to statements by the President of the House of Representatives of the United States, Mike Johnson, reported by Bloomberg, the federal tax credit of $ 7,500 to the purchase of an electric vehicle is likely to disappear in the next budgetary resolution. “I think there is more likely to be eliminated than to save him,” he said.
Increasing budgetary and political pressure
This decision is part of a global trend: Germany and even China have already started to reduce their incentives towards the electric transition. In the United States, the end of the credit would in particular be used to finance the vast program of tax reductions of the Trump administration. The current president, who has already expressed his opposition to mandates in favor of electric vehicles, has shown no interest in defending the incentive.
Bad news for manufacturers and consumers
The withdrawal of the tax credit would be added to the 25 % customs tariffs on imported vehicles, which would hit more affordable models head on such as the Ford Mustang Mach-E, the Chevrolet Equinox EV or the Wagoneer S Jeep, all assembled in Mexico. Result: these already unprofitable vehicles for their manufacturers could become financially untenable for sale without tax aid.
A perfect storm for the affordable electric vehicle market
Manufacturers are often held by regulatory requirements to sell a number of electric vehicles. Even if they lose money with each sale, they will have to continue to offer them, at least in the short term. The elimination of the tax credit is therefore likely to accentuate the losses for Ford, General Motors and Stellantis, while making electric vehicles much less competitive for buyers.
An outburst still uncertain
Everything is not played. Elected officials representing states where electric vehicle factories may oppose it. The Senate, with a slim republican majority, could also block the measure. But if she goes to the oval office, do not expect a presidential veto.
Act while there is still time
In summary, the future of electric vehicle tax credit seems to be more and more compromised in Washington. For consumers, this means that the cost of the models that were taking advantage of it could jump shortly.
Original Auto123 content.
