The Tax Credit: The End of the Road? The Good, the Bad, the Ugly and the Ubiquitous. Can the Tax Credit be Left Behind?

Now Republicans have full control of Washington. And the tax credit appears headed for the trash bin. It will be some time before that happens. Trump has been attempting to roll back tailpipe emission rules. There will be deals struck, legislation written, public comment solicited, hearings and more. How much time it all takes depends on how aggressive Trump and the Republicans want to be in unspooling Biden’s EV legacy. The Congressional sluggishness is likely to result in the incentive still being in the tax code by the end of the year.

Now the bad news, Congress is very likely to do away with the tax credit at some point in the future, at the insistence of Trump. Republican lawmakers in the past tried to kill the credit. None of those efforts went anywhere, because Democrats control the Senate and the White House.

The Trump era and the state of the auto industry: How did the IRA get rid of greenhouse gases, and how quickly did the White House respond?

Kathy Harris is the director of clean vehicles at the Natural Resources Defense Council. “But I think what we’ve seen is that these regulations for decades, as EPA has put them out, have really provided significant benefits to not only the auto industry, but also to Americans, to Americans’ wallets, and to public health as well.”

You’ll notice that the auto industry doesn’t seem especially exuberant about the changes. While all the billionaire moguls of Silicon Valley came out to celebrate Trump’s inauguration, the Big Three automakers of Detroit kept their distance. The only one to make the trek to DC to kiss the ring was Stellantis chair John Elkann — and even he split before the inauguration to fly back to Italy to hang with F1 star Lewis Hamilton. Who would blame him?

Trump could face resistance from his own party. In August 2024, 18 Republicans sent a letter to House Speaker Mike Johnson opposing the repeal of energy tax credits. The members represent states with some of the highest levels of clean energy investments as a result of the IRA.

The White House has the clearest way to loosen rules requiring automakers to make more EVs is to target vehicle fuel efficiency and tailpipe standards. The manufacturers need to reach certain levels of gas efficiency across all their cars in order to cap pollutants released. One of the easier ways automakers can hit those goals is to sell more electric vehicles, which don’t use gas or emit tailpipe pollutants at all. It took more than three years for the Trump administration to replace Obama-era fuel efficiency standards. Harris says that this time around agencies might be able to change rules more quickly. It can take months or even years to complete the process.

“The executive order is simply directing the agencies to take a look at the regulations,” Harris said. “So, I think within 30 days is the deadline of when the agencies need to report back with a list of regulations for review.”

EV Sales: Where Will They Go? Next-to-Leading Directions for the American Auto Industry and the U.S.

What will happen next is something anyone can guess. Will EV sales flatline? Rivian will be acquired by VW. Will the Nissan-Honda merger fail? Will Stellantis go bankrupt? Will Republicans lawmakers who are benefiting from Biden’s investments force Trump to rethink rolling back incentives? Will Musk remain in Trumps good grace for long enough to cash out?

consumers will continue to be able to buy electric vehicles, and the automakers will continue to make and sell them. It takes around five years for manufacturers to build a car after some stricter emissions standards kick in in the late thirties, which means cars should be sold after that.

Monday’s executive order demands US agencies take a look at their rules related to EVs and determine whether they’re “unduly burdensome” and interfere with consumer choice. The reports are due in 30 days.