Republican House members have moved forward with plans to eliminate clean-vehicle tax credits by passing a version of President Donald Trump’s ‘One Big Beautiful Bill Act,’ as reported by Car and Driver. If enacted, the legislation could significantly impact electric vehicle sales in the U.S., as it would revoke subsidies for battery production and remove incentives for consumers to purchase electrified vehicles.
The House Republicans passed a tax and policy bill on Thursday that could hinder the electric vehicle industry. The legislation will slow the sales and production of battery-powered cars and trucks across the U.S., potentially undermining global efforts to combat climate change.
The bill will eliminate the Clean Vehicle Credit, which was first introduced during President Barack Obama’s administration and later expanded under President Joe Biden through the Inflation Reduction Act. Currently, buyers of hybrid and electric vehicles can receive a $7,500 discount on eligible new models, subject to restrictions based on vehicle price and household income.
The bill sets December 31, 2026, as the official end date for the clean-vehicle credit program. However, for most established automakers, the credit would essentially be discontinued by the end of this year. It is due to a provision in the bill stating that manufacturers who have sold more than 200,000 qualifying vehicles will see the program terminated on December 31, 2025.
The bill also introduces new registration fees for hybrid and electric vehicles as a replacement for fuel taxes. Hybrid owners would face a $100 registration fee, while electric vehicle owners would incur a $250 annual charge. These new fees would substantially increase the overall cost of owning an electric vehicle.
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