- House vote strikes down $7,500 EV credit, putting pressure on electric vehicle affordability.
- End of federal tax breaks could decelerate EV adoption, challenging industry's momentum.
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The US House of Representatives has passed President Donald Trump‘s tax and spending bill, known as the “Big Beautiful Bill.” This move effectively eliminates the $7,500 tax credit for new, US-made electric vehicles (EVs).
What Happened: The tax incentive will be discontinued from September 30th. This is likely to make EVs more costly, and some manufacturers have already started adjusting their prices accordingly.
The Jeff Bezos-backed EV startup, Slate Auto, has notably removed the “under $20,000” expected price tag for its forthcoming electric pickup truck from its website.
As per the US Department of Energy’s website, 20 electric and hybrid vehicles currently benefit from the $7,500 tax credit.
However, not all models of these vehicles qualify for the tax incentive. Some are restricted to specific model years and trims, and there is a maximum retail price limit of $80,000 for vans, SUVs, and pickups, and $55,000 for all other vehicles.
According to report by Insider, only the 2026 version of the Hyundai IONIQ 9 qualifies for the tax credit. The credit is only available to buyers with an adjusted gross income of $150,000 or less, although the limit extends to $300,000 for married couples filing jointly and $225,000 for heads of households.
A separate federal tax credit of up to $4,000 for used EVs and hybrids will also end in September.
As per the report, a number of electric vehicles currently qualify for the full $7,500 federal tax credit in the U.S. These include the Acura ZDX; Cadillac LYRIQ, OPTIQ, and VISTIQ; Chevrolet Blazer, Equinox, and Silverado; Chrysler Pacifica (hybrid); Ford F-150 Lightning; Genesis Electrified GV70; GMC Sierra; Honda Prologue; Hyundai IONIQ 5 and IONIQ 9; Jeep Wagoneer S; Kia EV6 and EV9; and Tesla Cybertruck, Model 3, Model X, and Model Y.
Eligibility for the tax credit may vary based on factors such as the vehicle’s configuration, MSRP limits, battery sourcing, and final assembly location.
Why It Matters: The discontinuation of the tax incentive is a significant blow to the EV industry, which has been banking on such incentives to boost sales.
The removal of the $7,500 tax credit could potentially slow down the adoption of EVs, as it increases the cost for consumers. This could also impact the competitiveness of US-made EVs in the global market.
The move is particularly significant for startups like Slate Auto, which are trying to break into the market with affordable EV options. The end of the tax credit could force these companies to rethink their pricing strategies and business models.
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