US Government Wants To Tax EVs Instead Of Subsidizing Them

President Trump’s administration appears to be determined to change the conversation around EVs. The latest round isn’t as general a move as before. Instead, a tax on imported cars starting in April is now on the table, the GOP is seeking to repeal the current $7,500 tax credit for EV purchases and introduce a $1000 tax on EV purchases instead, and Trump’s new Environmental Protection Agency (EPA) administrator is working to end rules due to outlaw combustion engines after 2035 in California. This would make even the cheapest EVs, like the Equinox EV, considerably more expensive to own. It’s a lot to unpack, but we’re going to do it.

Repeals And A $1,000 Tax On Electric Vehicles

We already know the Trump administration is targeting electric vehicles by rolling back federally sponsored EV programs, including charging, and repealing federal incentives for EVs. Now, Senator John Barrasso (R-WY) has introduced the Eliminating Lavish Incentives to Electric Vehicles Act, a clearly reverse-engineered name, as it’s referred to as the ELITE Vehicles Act. Propaganda aside, the act is co-sponsored by 14 other senators and backed by the National Taxpayers Union, Americans for Prosperity, and, predictably, the American Fuel & Petrochemical Manufacturers.

“Repealing these reckless tax credits from the Biden administration once and for all will stop Washington from giving handouts to our adversaries and high-income individuals,” Senator John Barrasso said. The credits were, in fact, introduced in 2009 under President Obama. The average car purchase cost in the US is currently $47,401, and there are plenty of EVs under $50,000. The idea of the tax credit is to make EVs more affordable for people, and given the number of EVs on the road, it has been doing its job.

The second bill is the Fair Sharing of Highways and Roads for Electric Vehicles (Fair SHARE). The claimed aim of the bill is to force EV owners to contribute funds to the Highway Trust Fund (HTF) via a $1,000 tax. The HTF provides for the maintenance of bridges and roads, and the claim is that EVs don’t contribute through the federal gasoline tax. According to the bill’s champion, Senator Deb Fischer (R-NE), the higher weight of EVs has a disproportionate effect on road surfaces. In reality, EVs can weigh as little as 3,934 pounds (Nissan Leaf), and most electric sedans and crossovers weigh around 4,500 to 4,900 pounds. It’s only when you get into the high-end EVs that they get heavy enough to weigh as much as a full-size pickup truck.

Overturning California’s ICE Ban

California has set a lot of standards in its time, and after Trump’s previous presidency, the EPA under President reinstated California’s waivers to set its own pollution standards, which allowed the state to push through the Advanced Clean Cars II regulations. The regulations would ensure only new zero-emissions new passenger vehicles, SUVs, and trucks would be sold in the state by 2035.

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However, Trump’s EPA pick, Lee Zeldin, plans to send the grant waivers to Congress for review where it would be subject to the Congressional Review Act and overturned by Republicans. When the waivers were reinstated, the Government Accountability Office agreed with President Biden that they didn’t need to be subjected to review by Congress as they were not federal rules. However, California was put under a lot of scrutiny for what is, ultimately, an unrealistic goal in such a short time.

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The Ramifications And An Opinion

At this point, automakers’ and dealership owners’ heads must be spinning while consumers are being told two very different things all the time. The fight between the two parties is a game of political tennis, one determined to force everyone into all-electric vehicles, the other going for all-out protectionism for the oil industry. All the time, the real answer to bridging the gap is regular and plug-in hybrids. That’s where consumers are trending and automakers know this. Politicians don’t seem to be listening, though. It very much looks like they’re always either grandstanding their ideals or comfortably in the pocket of the oil industry.