By Lauren Fix, The Car Coach®
Video Link: https://youtu.be/il3l7sob66E
The EV Tax Credit Panic: Dealers Scramble as Policy Shifts
When auto dealers start writing impassioned letters to Congress demanding to keep electric vehicle (EV) tax credits alive, it’s a clear sign the honeymoon phase of EV policy is over. Behind the public messaging of “going green” and “building the future,” a growing number of dealers and manufacturers are panicking — not because consumer demand is soaring, but because it’s not. The incentives have gone beyond promoting environmental goals; they’re propping up an industry shift that never had strong grassroots support in the first place.
Now, with the federal government poised to scale back or eliminate EV tax credits, parts of the automotive industry are scrambling. CarMax, Carvana, and several dealer groups are urging Congress to preserve the subsidies that have underwritten their investments in EV sales and service. Their plea is simple: without the $7,500 incentive on new EVs and $4,000 on used models, sales will slump. One Seattle-area dealer even warned of a 25–30% drop in EV sales.
Let’s be honest — this isn’t about saving the environment anymore. It’s about protecting profit margins and preserving political capital after years of lobbying silence. These same companies and their trade groups didn’t push back when mandates were being written into law. Now that the tide is turning, they want taxpayers to continue footing the bill for what is, at its core, a luxury purchase — typically made by high-income households with easy access to charging infrastructure. For most Americans, EVs remain unaffordable, and charging options are limited.
What’s Changing in Washington?
Congressional Republicans, backed by growing public skepticism of EV mandates, are working to remove the taxpayer-funded cushion that has made EVs appear more affordable than they actually are. The Senate version of the “Big Beautiful Bill” proposes ending EV tax credits by September 30, 2025 — three months earlier than the House version. The credits were originally set to expire in 2032.
Here’s what’s at stake:
New EVs (under $80,000): Up to $7,500 in tax credits
Used EVs (under $25,000): Up to $4,000 in tax credits
Automakers under the 200,000-EV threshold: Still qualify until 2026
But under Section 112002 of the Senate bill, these credits are set to be eliminated. Additionally, the bill includes a $250 annual registration fee for EVs and a $100 fee for hybrids and plug-in hybrids — meant to compensate for lost gas tax revenue used to maintain highways. It’s also a tacit acknowledgment that EV drivers aren’t currently paying their share for public roads, which are deteriorating across the country.
Too Little, Too Late?
Dealers and manufacturers had years to challenge the growing wave of federal mandates that funneled billions into EV production and infrastructure. They didn’t — because the gravy train was running. Generous government contracts, purchase incentives, and regulatory advantages made it too lucrative to raise objections.
Now, with the Trump administration signaling a sharp policy reversal, the industry wants the benefits to stay — even though the rules are changing.
But this is the cost of doing business. You don’t get to opt out of consequences now that the political winds have shifted. If customers want EVs, they’ll buy them.
That’s how the free market works. What we’re seeing is an attempt to artificially prop up demand with taxpayer dollars, even as surveys show most Americans still prefer internal combustion or hybrid vehicles. Cost, range anxiety, and lack of charging infrastructure remain major concerns.
A Judicial Speed Bump in the EV Rollback
In a twist that highlights the tangled relationship between politics and policy, a federal judge has temporarily blocked the Trump administration from halting EV infrastructure funds for 14 states. These funds — part of President Biden’s Infrastructure Investment and Jobs Act — were designed to eliminate “range anxiety” by building a nationwide EV charging network.
The result? $5 billion spent, and only 7 EV chargers are live today — a staggering waste of taxpayer dollars.
U.S. District Judge Tana Lin ruled that withholding these funds exceeded federal authority. As a result, states like California, New York, and Colorado will see their EV infrastructure plans reinstated — for now. An appeal is underway, and many expect these funds to eventually be clawed back.
Still, the ruling doesn’t shift the larger momentum. Trump’s Department of Transportation has made its stance clear: the Biden-Buttigieg New Electric Vehicle Initiative was a failure — and it’s being dismantled.
Editorial Disclaimer
The views and opinions expressed in this blog post are those of the author and do not necessarily reflect the official policy or position of the National Motorists Association. We believe in fostering open dialogue and welcome diverse perspectives on issues affecting motorists. If you would like to submit a response or opposing viewpoint, we encourage you to contribute. Please email us at greg@motorists.org for submission guidelines.
