If you're thinking of buying an electric car in 2025, it may soon cost more.
President-elect Trump has indicated he will eliminate the $7,500 tax credit for electric vehicle purchases included in President Biden's Inflation Reduction Act.
One recent estimate found EV sales could fall as much as 27% if that tax break goes away.
Scripps News spoke with Albert Gore III, the executive director of the Zero Emission Transportation Association, about the effects of the tax break and what could happen if it's ended.
"This tax credit is really less of a vehicle credit right now than it is a mineral and battery component credit. And the reason for that is the restrictions that were put within the credit when it was passed two and a half years ago," Gore said.
"Vehicle adoption would likely fall a bit but the most important impact of the credit has been on the mining sector and in the onshoring of battery component manufacturing. I'm very concerned about the impact to the upstream and the midstream parts of the supply chain that are growing really quickly in the United States."
"This is a great thing that's happening," Gore said of the growth of U.S. EV manufacturing. "It's an effort that has really broad bipartisan support. And again — this is a credit that's not necessarily designed to get more vehicles on the road as quickly as possible. It's designed to shift the whole global supply chain outside of China's influence. I'm hopeful that that will be considered and we'll maintain this credit."
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For consumers, losing the tax credit could mean steeper sticker prices for EVs, and may set back efforts by companies like Ford to compete in the market.
The Alliance for Automotive Innovation, an industry trade group with members including Ford, GM, Honda, Hyundai and Kia, has urged Congress to keep EV tax breaks in place because they are "critical to cementing the U.S. as a global leader" in the EV space.
Tesla CEO Elon Musk has told investors that ending the tax credit would "probably benefit Tesla" long term, since it already has a foothold in the market compared to many traditional automakers that are now shifting to EVs.
Trump put Musk, a close ally, at the head of the non-government Department of Government Efficiency, which is set to advise the White House and the Office of Management and Budget on governmental reform during the new administration.
Politico reported in early December that Musk has since called directly for the removal of EV credits.
"I think we should get rid of all credits," he told reporters, while meeting with lawmakers on Capitol Hill to discuss government downsizing plans.
