• The “Big Beautiful Bill” just passed by the U.S. congress contains several provisions that will affect electric vehicle sales in the U.S.
In the U.S., the differences of philosophy between the Democratic and Republican parties are perhaps starkest on the question of vehicle electrification. Joe Biden's Democratic administration promoted the shift to EVs with aggressive new measures, or extensions of ones introduced under the Obama administration.
The return of Donald Trump to the White House was seen as a threat to the incentives in place, and we’re about to see how the industry will be affected.
EV credits to be withdrawn
After months of the U.S. administration promising to eliminate the $7,500 USD credits for purchasing an electric vehicle, the Republican-controlled congress has adopted a version of President Trump's bill titled “One Big Beautiful Bill Act”. The wide-ranging piece of legislation is a repository of almost all of the president’s pet projects. Its very breadth will make getting it passed into law more complicated, but it also creates the risk that many of the provisions in it won’t be analyzed as closely as they should.
One of those provisions could potentially severely harm electric vehicle sales in the U.S.. If passed, the bill will eliminate the $7,500 USD credit, but it will also reduce subsidies for battery manufacturing.
A small consolation is that the provision calls for the credit program to end on December 31, 2026, which gives consumers some time. On the other hand, it specifies that for manufacturers who have sold more than 200,000 eligible vehicles, the program will end on December 31 of this year.
And that's not all. Hybrid and electric vehicles will, if the bill passes as is, be subject to annual fees of $100 and $250 USD, respectively. On this point, the question of EV owners' contribution is a subject of debate.
Safe to say, if all the proposed measures are applied, sales of electric models will decline significantly decline in the United States, which could potentially affect the supply in the Canadian market as well.
A Princeton University study, reported by the New York Times, predicts that if Republicans succeed in eliminating incentives, electric vehicle sales will only account for 24 percent of new vehicle sales in the U.S. in 2030, which is far from the targeted objectives.