Fury as popular tax break set to end in the fall: 'Hypocritical and short-sighted'

Daily Mail​

5 hours ago

A well-used tax credit is being put out to pasture. Car analysts are not happy.
The Republican sweeping Big, Beautiful Bill will eliminate the $7,500 tax credit for new EV and plug-in hybrid purchases — a key incentive created under the Inflation Reduction Act.
A $4,000 credit for buyers of used electric vehicles will also get the axe on September 30.
Critics of the credit argue it reins in spending on programs that haven't lived up to expectations.
'Following the passage of the Inflation Reduction Act in 2022, there have been significant concerns about the cost of these tax credits,' Bernie Moreno, a Republican Senator from Ohio and former car dealership manager, wrote in an open letter.
But supporters of the tax break see a missed opportunity.
'It's almost hilariously hypocritical and short-sighted — but that's the Trump Administration,' Robby DeGraff, the manager of consumer insights at AutoPacific, told DailyMail.com.
'It's really all a shame, especially from a paranoid administration so hellbent on ensuring "consumer choice."'
Buyers can still qualify for credits on eligible vehicles purchased before September 30.
Republicans have long criticized the EV credits, arguing the incentives were out of step with consumer demand and too generous to an industry they see as premature.
EV adoption has steadily grown since the program launched. But the vehicles still make up just around 10 percent of the overall new car market — falling short of the rapid transition lawmakers envisioned.
The credit was designed with two main goals in mind: supercharge domestic manufacturing and encourage Americans to transition to lower-emission vehicles.
DeGraff outlined three key ways he believes the removal of the credit under Trump's bill will backfire.
First, he said the bill will push car prices even higher.
In June, it cost around $49,000 to drive a new set of wheels off a dealership lot. That pushed the average monthly payment above $700.
Right now, Americans are paying a premium for electric vehicles, in part due to the costs of ramping up domestic production.
The now-expiring credit helped offset those investment costs for consumers, but only for vehicles built largely in the US.
Second, DeGraf said the tax bill will crush American manufacturing.
'Slower sales and demand will lead to production pauses at plants and consequently layoffs,' he said.
'Perhaps the comical thing to consider, is that many of these states that do build EVs and have received massive investments and had automakers employ massive amounts of workers are Republican states.'
Finally, DeGraff said it makes it harder for US automakers to compete globally.
Major Chinese automakers have received huge subsidies for their vehicles.
Companies like BYD, Nio, XPeng, and Zeekr have built competitive, low cost vehicles in highly automated factories.
The cars typically have higher build quality, electric range, and technology, all for a cheaper price. And they're coming to global markets, where American manufacturers want to be competitive.
China and EU officials are currently negotiating how to bring the cheap EVs to the European market without crushing the continent's local carmakers.
American delegates are reportedly not involved in that negotiation.
Detroit's big three carmakers likely aren't having their voices heard in the market, which is the largest in the world.
Meanwhile, some of America's biggest carmaking employers — including GM, Ford, Stellantis, Toyota, Nissan, Honda, and their parts suppliers — are already under pressure.
Carmakers are paying 25 percent tariffs on some of their vehicles and parts shipped to the US.