U.S. Senate Republicans Introduce Bill to Limit EV Tax Credits
WASHINGTON, June 16 (Reuters) – U.S. Senate Republicans have proposed a tax and budget bill that would end the $7,500 tax credit on new electric vehicle sales 180 days after the measure is signed into law. The bill would also immediately end the credit for leased EVs manufactured outside North America.
The Republican Senate Finance Committee’s proposal marks a significant shift from former President Joe Biden’s policy, which encouraged electric vehicles and renewable energy to combat climate change and reduce emissions. The bill would also end a $4,000 used-vehicle EV tax credit 90 days after approval.
Currently, leased vehicles qualify for the $7,500 credit without restrictions on content or assembly location. However, under the proposed bill, they would lose this credit unless they meet the same stringent North American assembly, battery, and critical mineral content rules as purchased vehicles.
The House of Representatives has a different version of the bill, which would allow the $7,500 new-EV tax credit to continue through the end of 2025. It would also impose a new $250 annual fee on EVs for road repair costs and $100 for hybrid vehicles.
The Republican Senate proposal includes an exemption for interest paid on auto loans from taxes for new cars made in the U.S. through 2028. However, this exemption would be phased out for individual taxpayers earning more than $100,000 annually.
President Donald Trump recently signed a resolution to bar California’s plan to end the sale of gasoline-only vehicles by 2035, a move that has implications for the U.S. auto market.
