WASHINGTON — Federal tax credits for electric vehicles and clean vehicle standards ended last week, and advocates said the end of the policies will put the U.S. at a disadvantage.
President Donald Trump signed a budget reconciliation bill in July, ending federal EV tax credits and fuel economy standards. Previously, customers could receive a $7,500 tax credit for a new EV or a $4,000 credit for a used one. In Virginia, there are nearly 135,000 electric vehicles on the road, according to Atlas Public Policy.
Ingrid Malmgren, senior policy director for the advocacy group Plug In America, contended rolling back clean vehicle standards and incentives will hurt the U.S. economy.
“The policy changes that we’re seeing are largely going to undermine industrial progress in the United States,” Malmgren stressed. “Particularly in battery manufacturing, clean energy manufacturing, and automotive manufacturing.”
Republican lawmakers and Trump have railed against EV tax credits. They argued the market should determine what vehicle consumers drive, rather than government incentives to prop up the industry.
The end of the tax credit, however, comes as the price of EVs is dropping rapidly. Automotive data company Jato Dynamics found the price of EVs has dropped 25% since 2018, and savings on maintenance issues and gas could make it worth it to a pay a higher up-front cost for some consumers. Malmgren noted a Plug In America survey from this year found nearly 92% of EV drivers felt it is likely, or very likely, their next vehicle will be an EV.
“EVs are here to stay,” Malmgren emphasized. “We’ve found that the more people are exposed to electric vehicles, and the more they’re educated about them, the more confident they are in making the switch. And when people make the switch, they don’t want to go back.”
According to vehicle data company CARFAX, the end of the federal tax credit spurred an increase in EV sales, with EVs selling 30% faster than at the beginning of the summer.
