Oil-backed senators introduce bills to kill $7,500 EV tax credit, add $1,000 tax on electric cars

Republican Senators have introduced bills to not only kill the $7,500 tax credit for electric vehicles but also add a $1,000 tax at the purchase of new EVs.

President Trump campaigned on killing the $7,500 tax credit for electric vehicles. Therefore, it’s not surprising that it’s happening, but now we have a better idea of how.

Senator John Barrasso, along with 14 other GOP senators, has introduced a pair of bills going after electric vehicles.

The first one, unsurprisingly, would end the federal tax credit for electric vehicles, which includes the $7,500 credit for buying or leasing a new electric car, the $4,000 tax credit for used electric vehicles, and the incentives for charging stations.

Some hoped that legislators would push to end the tax credit for next year, which would have helped EV sales in the US in 2025, but the bill, as it stands, says that the credits would end 30 days after it is signed into law.

The second bill, sponsored by Senators Deb Fischer, Pete Ricketts, and Cynthia Lummis, would add a one-time $1,000 fee to the purchase price of a new electric vehicle.

GOP senators justify this by pointing out the lack of contributions from electric vehicles to fund the repair and maintain of highways, which is thought to be financed through taxes on gas and diesel. They arrive at $1,000 by calculating roughly the average contribution of a gas-powered car through the gas tax over 10 years.

Fischer said:

“EVs can weigh up to three times as much as gas-powered cars, creating more wear and tear on our roads and bridges.”

The most popular gas car in the US is the Toyota Corolla, which weighs about 3,000 lbs—or about 800 lbs less than a comparable electric Tesla Model 3—but it’s nowhere near three times heavier.

It’s worth noting that Fischer took $356,393 from the oil and gas industry during the last election cycle. It is one of her top contributors.

As for Barrasso, he takes even more money from the oil and gas industry: $781,381 during the last cycle.

Trump’s recently appointed Transportation Secretary Sean Duffy had signaled plans to impose new fees on electric vehicles.

Electrek’s Take

I’ve made my peace with the tax credit going away in the US. It’s going to cripple the country’s EV market, which is already way behind the rest of the world, but it sounds like Americans are OK giving up the lead on that front. So be it.

I was hoping that the change would be announced for the end of the year, creating some urgency to by this year – boosting sales in 2025, but it sounds like that won’t happen.

But the $1,000 fee is about as dumb as it gets. It doesn’t account for a vehicle’s size, weight, or efficiency. It’s a flat fee for everyone regardless of how much or how little they use the car. It makes no sense, and it is clearly meant to discourage electric vehicles.

If the GOP passes this legislation, it will sabotage its entire auto industry long term, including Tesla. They will lose EV expertise to the rest of the world.