Senate Republicans Propose Ending Federal EV Tax Credits, Imposing Annual Fees

Senate Republicans have proposed a tax and budget bill aiming to eliminate the $7,500 federal electric vehicle (EV) tax credit within 180 days of enactment, along with ending the $4,000 credit for used EVs and halting leased EV credits for vehicles produced outside North America. This contrasts with a House bill that would allow the credit to continue through 2025 or 2026 for certain automakers, while also imposing new fees on EVs and hybrids to offset declining gas tax revenues. Conservatives in the House Freedom Caucus are resisting any Senate efforts to soften cuts to green energy subsidies, including those for EV incentives, emphasizing the need to end all such subsidies except possibly for nuclear energy. The push to reduce or eliminate EV tax credits aligns with President Donald Trump's broader crackdown on electric mobility, including reversing California's emissions standards and potentially increasing automotive tariffs to promote domestic production. However, critics warn that increased fees and reduced incentives could slow EV adoption and undermine climate goals, as seen in states like North Carolina where combined state and potential federal fees could significantly raise ownership costs. The competing House and Senate approaches reflect ongoing tensions between conservative priorities to reduce subsidies and more moderate views aiming to balance fiscal concerns with support for emerging clean technologies.