Donald Trump proposes eliminating tax credits for electric vehicles if he wins the election. His plan, dubbed the “One Big Beautiful Bill,” directly targets current incentives. This means the credit of up to $7,500 for new cars and the $4,000 for used cars could disappear.
The idea is quite simple: remove a key support currently driving the adoption of electric vehicles in the United States. According to the discussed bill, the timeframe would be rapid. The end of the tax benefit would be imminent if it becomes law. A radical shift in green stimulus policy.
This move would be a turning point in the US automotive market. Potential buyers and the industry are already on alert. The possible elimination would affect the plans of many people who were counting on this discount.
Apply NOW for the $7,500 EV tax credit (before it’s too late)
Today, thanks to the Inflation Reduction Act, there is a federal tax credit. This tax credit applies to eligible new electric vehicles and can reach up to $7,500. There is also a specific one for used electric vehicles, with a cap of $4,000. Strict requirements define who and what vehicles qualify.
For new vehicles, the full credit is split into two halves. $3,750 is awarded if the vehicle meets battery component assembly and origin standards. The remaining $3,750 depends on the use of critical minerals processed in the U.S. or allied countries. If only one criterion is met, only half is received.
Additionally, there are price limits to qualify for the credit. Cars cannot exceed $55,000; pickup trucks, SUVs, and vans have a cap of $80,000. There are also adjusted gross household income limits. These limits vary depending on the taxpayer’s filing status. They are key to determining eligibility.
This incentive is individual and applies to each qualifying purchase. It cannot be combined with multiple vehicles purchased simultaneously by the same person. The process requires verifying eligibility before the transaction. It is mandatory to confirm all details with the dealer and the IRS.
The benefit is direct to the end user of the vehicle. Businesses can also access these credits under certain conditions, but the rules differ. The primary focus of these credits is on individual consumers. They are designed to make electric cars more affordable.
How to apply before this tax credit is lost
The vehicle must be assembled in North America. It must also meet regulations regarding the origin of key battery components. The selling price cannot exceed established limits ($55,000 or $80,000).
The battery must have a minimum capacity of 7 kWh. Additionally, the buyer’s modified adjusted gross income (MAGI) must fall within federal limits. These are: $150,000 (single), $225,000 (heads of household), or $300,000 (married couples). Verify all of this is essential before purchasing.
At the time of purchase, the buyer has two main options. They can choose to claim the credit later when filing their annual tax return. To do so, they must use IRS Form 8936. The other option is more immediate and convenient for many.
Transfer credit: the quick option
The second option is to transfer the tax credit directly to the dealer at the time of purchase. This requires the dealer to participate in the transfer program. If they do, an immediate discount is applied to the retail price of the electric vehicle. The benefit is immediately apparent.
This transfer is equivalent to an additional down payment or a direct reduction in the financed amount. It simplifies the process for the buyer, who doesn’t have to wait for their tax return. The dealer then handles the IRS process to recover that amount. This is the preferred option for many.
In any case, the buyer must provide the vehicle’s VIN, the date of purchase or service, and the selling price. It’s mandatory to obtain a credit eligibility certificate from the seller. This document confirms that the car complies with IRS regulations.
Trump proposes eliminating this tax benefit: what happens next?
If the “One Big Beautiful Bill” passes, the change would be drastic and rapid. The credit for new electric cars would end 180 days after the law goes into effect. For used electric vehicles, the deadline would be even shorter: just 90 days. An end announced with little room for adaptation.
Even worse, credits for leased vehicles manufactured outside of North America would be eliminated immediately. There would be no grace period. This would instantly deprive a segment of the automotive market of that key support. A swift blow to certain electric mobility options.
The direct consequence is clear: many buyers would lose the opportunity to reduce the cost of their electric car by thousands of dollars. This incentive is currently a major driver of sales. Its disappearance could slow the transition to electrification of the US vehicle fleet.
