Potential Repeal of EV Tax Credit Could Reshape U.S. Electric Vehicle Market

President-elect Trump's team is reportedly considering ending the $7,500 federal EV tax credit, raising uncertainty for automakers and buyers.

The $7,500 federal EV tax credit, introduced under the Inflation Reduction Act, has been credited with boosting U.S. EV sales by 46% in 2023 compared to the previous year.
Reports indicate that the incoming Trump administration is exploring the possibility of eliminating the tax credit, though no official decision has been announced yet.
Industry experts predict a potential 27% drop in EV sales if the credit is repealed, which could significantly impact automakers and hinder EV adoption in the near term.
The tax credit currently applies to EVs assembled in North America with price and income caps, and includes additional requirements for battery components and critical minerals sourcing.
Leasing an EV may offer a temporary workaround for consumers, as leasing companies can pass on subsidies even for vehicles that do not meet all eligibility requirements.