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EV Tax Credits on Chopping Block

Meanwhile, plentiful supply creates sales opportunities.

May 13, 2025
EV Tax Credits on Chopping Block

Some of the first-quarter EV sales surge came in consumers getting ahead of any trade tariff push on vehicle prices.

Credit:

Pexels/Tom Fisk

2 min to read


As the Trump administration and congressional Republicans target electric-vehicle subsidies, consumers have a potentially fading chance to  get deals, just as EV prices have come in line with gas-powered models.

House Republicans proposed this week to eliminate tax credits of up to $7,500 for EV purchases that have boosted sales of electrified vehicles and put EV transaction prices on par with those for internal combustion engine vehicles.

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Combined with axing incentives for clean-energy production, the tax credit tanking would go toward the Trump administration’s tax-cut package.

With the EV tax credits still in place, the average transaction price for EVs is now $45,600, just $500 more than for ICE vehicles, according to J.D. Power research.

The House GOP proposal would phase out the EV tax credits, ending them completely by the end of next year. At that point, the average EV ATP would tick back up to $51,200, J.D. Power said.

The figures don’t take into account any inflation related to U.S. trade tariffs, which are still very much in flux.

Meanwhile, consumers can take advantage of plentiful EV inventory on dealer lots, which totaled about 155,000 new units this month, according to J.D. Power. It pointed out that the existing inventory also isn’t subject to tariffs because it was already in place before they took effect.

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Automakers have introduced more EV models to answer regulatory pressures, bringing the number available on the U.S. market to more than 60, J.D. Power said. With the broad selection and lower ATPs, market share jumped 18% year-over-year in the first quarter, most of it from mass-market consumers.

Some of the first-quarter EV sales surge came in consumers getting ahead of any trade tariff push on vehicle prices.

If the EV purchase tax credits indeed end, it’s unknown if the cost difference will be passed along to consumers and how the change will affect EV sales.

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