- Federal and state-level tax credits on electric vehicles may disappear after President-elect Donald Trump is sworn in.
- The next few weeks may be the final window for securing some of the best offers on EVs before a likely policy shift.
- A lot of automakers are already offering great lease incentives, so good EVs have never been cheaper.
Fasten your seatbelts, Americans. The next chapter in the country's transition to green energy may be a lot bumpier. That’s because President-elect Donald Trump's favorite word is "tariffs." Want to guess what his least favorite word is? My guess is "incentives."
The outgoing Biden administration championed incentives under the landmark Inflation Reduction Act. The IRA incentivized buyers to go electric with up to $7,500 in federal tax credits. Additionally, it had provisions that awarded billions of dollars to automakers to produce EVs and batteries locally in the U.S.
By contrast, Trump has launched a smear campaign against EVs and has threatened to eliminate the incentives that have made electric cars more affordable and accessible. Now he has the legitimate authority and power to reverse some of that progress.
However, as InsideEVs previously reported, rolling back incentives under the IRA won’t be straightforward for Trump. It may not work. Even if he can pull it off, nothing will change this year. He won’t be sworn in until January 20, so all the executive orders he has pledged to sign—including ones that will end what he calls the “green new scam”—won’t be effective until early next year.
By making a move now, you may benefit from the $7,500 federal clean vehicle credit and potentially save thousands of dollars at the point of sale, depending on your income and tax liabilities.
The average transaction price of an EV in September was $56,351, according to Cox Automotive. That’s higher than the industry average, but has been declining over the years. If Trump guts the IRA, EVs could become even more expensive and automakers may pass on the production costs—which are heavily subsidized right now—to consumers.
The incentives are also why automakers have been able to offer insane lease and finance deals to get their EVs off the lots and increase adoption rates. InsideEVs has compiled a full list of the best offers on EVs and plug-in hybrids.
But the change in direction is important for more than just car shoppers. The U.S. auto industry employs millions of people and contributes over $1 trillion to the economy annually. If the industry wants to stay relevant in a global market that's rapidly transitioning to EVs, automakers can't stop investing in EV technology, even if the incoming Trump administration rolls back the purchase and manufacturing incentives. They've invested billions in EVs to stay competitive globally, especially in China—where EVs are already the norm. Chinese EVs are also better than their Western counterparts in many ways, and American auto executives know it.
So, while the auto industry navigates this period of profound uncertainty, the next few weeks might be your final window—at least in the interim, before things get better or worse—to snag that EV you’ve been eyeing.
Have a tip? Contact the author: suvrat.kothari@insideevs.com
