As President-elect Donald Trump continues to name members of his cabinet, a bit of a policy news came out this week. Reuters reported that Trump’s transition team wants to get rid of the $7,500 tax credit for people who buy electric vehicles.
Ending the tax credit could have negative implications on the EV industry, which is struggling in the United States. The subsidy of $7,500 for the purchase of a new EV, and up to $4,000 for a used vehicle, is part of the Biden administration’s Inflation Reduction Act.
Trump’s choice for interior secretary, North Dakota Gov. Doug Burgum, R, has been one of the major players in the discussions to repeal it. Those discussions have supposedly taken place at Trump’s compound in Florida.
The Alliance for Automotive Innovation, a trade group representing major automakers, had urged Congress last month to retain the EV credits, claiming they make the United States a leader in automotive technology.
Adding to the intrigue is Trump ally Elon Musk, who is the CEO and founder of Tesla, the largest EV seller in the United States. Musk is on record as saying that ending the subsidy might hurt sales of Tesla but it would devastate its competitors.
Killing the tax credit could save the Trump administration lots of government funding, as Trump looks to extend tax cuts that are set to expire in 2025.
