- The proposed bill would end EV tax credits for new and used vehicles in months.
- Leased EVs made outside North America would lose tax credits under the new bill.
- Revised versions of the bill may change the timeline before Senate approval.
The US government might soon deliver a blow to electric vehicle buyers, as President Donald Trump’s One Big Beautiful Bill Act aims to cut the $7,500 EV tax credit. While the Senate still has a few months to weigh in, Republicans have already drafted a separate tax and budget proposal that could bring the curtain down on the credit much sooner, affecting both new and used EVs.
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If passed, the new bill would eliminate the $7,500 credit for new EV purchases within 180 days. The plan also targets leased electric cars, particularly those made outside North America, by removing any tax incentives for them immediately. Used EV buyers wouldn’t be off the hook either, as the proposed bill would end the $4,000 credit for used EVs just 90 days after it’s approved.
Phasing Out the EV Tax Credit Faster
Under the One Big Beautiful Bill Act passed by the House in late May, the EV tax credit would be phased out after 2026, six years earlier than the Biden administration had planned. However, for most car manufacturers, the credit would become unavailable at the end of this year, as in 2026, it would only be offered to companies that have sold fewer than 200,000 EVs in the United States.
Trump’s bill also calls for the axing of the used EV tax credit by the end of 2025. Crucially, as the bill moves through the Senate, revisions will likely have to be made before it’s approved.
The EV Credit Cuts Keep Coming
This new proposed bill from the Republican Senate Finance Committee also proposes to end the $7,500 for leased vehicles, which is currently available without restrictions on the origin of vehicle content or where an EV is built. However, EVs that are leased and meet North American content rules would remain eligible for the credit, but only for 180 days after the bill is approved, Reuters reports.
Regardless of when the bill is approved, it’s clear Republicans are coming after EV subsidies, so if you want to buy or lease a new or used EV with a generous tax credit, you probably only have a few more months at most to do so.
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