Trump-Led U.S. Government Would Axe EV Tax Credit, Report Claims

It looks like electric vehicle manufacturers are going to have a much harder time attracting customers in the U.S. when president-elect Donald Trump steps into the White House in January.

Sources with direct knowledge of the matter have told Reuters that the Trump team is planning to axe the $7,500 credit for EV buyers in a tax-reform move aimed at reducing the country’s expenses.

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While EV sales in the U.S. keep increasing, the current growth is far slower than anticipated.

Ironically, the biggest EV maker in North America, Tesla, appears to support ending the subsidy, Reuters’ anonymous sources have said. Back in July, CEO Elon Musk admitted that the end of the tax credit might slightly hurt his company’s sales but would be "devastating" to competitors, including legacy automakers such as General Motors, Ford and Hyundai.

The $7,500 subsidy was a signature measure of outgoing Democratic President Joe Biden's Inflation Reduction Act (IRA). In an Oct. 15 letter, the Alliance for Automotive Innovation urged the U.S. Congress to retain the EV tax credits, calling them "critical to cementing the U.S. as a global leader" in future auto manufacturing.