Senate Republicans Propose Ending EV Tax Credits by September 30
Key Insights
Senate Republicans introduced a revised tax bill aiming to terminate the $7,500 EV tax credit for new vehicles and $4,000 for used EVs by September 30.
The bill contrasts with the House version, which extends the credit through 2025 and 2026 for certain automakers.
Additional provisions include eliminating fines for fuel economy violations and exempting interest on U.S.-made auto loans.
The proposal reflects a broader Republican shift away from Biden-era climate policies, including opposition to California's 2035 gas-car ban.
Senate Republicans unveiled a revised tax and budget bill late Friday that seeks to terminate the $7,500 federal tax credit for new electric vehicle (EV) purchases and the $4,000 credit for used EVs by September 30. The move marks a sharp departure from the Biden administration's climate-focused policies, which have prioritized EV adoption to reduce emissions and combat climate change.
The Senate bill contrasts with the House of Representatives' version, which would allow the $7,500 credit for new EVs to continue through 2025 and extend it to 2026 for automakers that have not yet sold 200,000 EVs. The Senate proposal also eliminates fines for automakers failing to meet Corporate Average Fuel Economy (CAFE) standards, a measure seen as favoring gas-powered vehicles. Additionally, the bill exempts interest on auto loans for U.S.-made vehicles through 2028, though this benefit phases out for individuals earning over $100,000 annually.
Republicans have increasingly targeted EV incentives, reflecting a broader policy shift away from renewable energy initiatives. The Senate bill initially included a provision to force the U.S. Postal Service to scrap its fleet of 7,200 EVs, including Ford e-Transit vans and Oshkosh Defense-built delivery vehicles, but this was dropped after a ruling from the Senate parliamentarian. The Postal Service had warned that scrapping the EVs would cost $1.5 billion.
The proposal follows President Donald Trump's recent signing of a resolution blocking California's plan to ban gasoline-only vehicles by 2035, a policy adopted by 11 other states representing a third of the U.S. auto market. The Republican-led effort underscores growing political divisions over climate policy and the future of transportation in the U.S.