President-elect Donald Trump’s transition team is considering eliminating the $7,500 consumer tax credit for electric vehicle purchases as part of broader tax reform legislation, two sources said. direct knowledge of the file. Reuters.
The end of the tax credit could have serious consequences on an American transition already at a standstill. And yet, representatives from Tesla — by far the nation’s largest electric vehicle maker — told a Trump transition committee that they supported ending the subsidies, the two sources said, speaking under the guise of ‘anonymity.
Tesla CEO Elon Musk, one of Trump’s biggest backers and the world’s richest person, said in July that removing the subsidy could slightly hurt Tesla’s sales but would be “devastating” for its American competitors in the field of electric vehicles, which include historic automakers such as General Motors.
Shares of Tesla closed down almost 6% at $311.18, while shares of smaller electric vehicle rival Rivian closed down 14% at $10.31. Lucid, another electric vehicle maker, fell 5% to $2.08.
Repealing the subsidy, a signature measure of Democratic President Joe Biden’s Inflation Reduction Act (IRA), is being discussed in meetings by an energy policy transition team led by billionaire oilman Harold Hamm, founder of Continental Resources, and North Dakota Republican Governor Doug Burgum. , indicated the two sources.
The group has met several times since Trump’s election victory on November 5, including at his Mar-a-Lago club in Florida, where Musk has also spent a lot of time since the election.
Representatives for Tesla and Ford did not respond to requests for comment. GM and Stellantis declined to comment.
The Alliance for Automotive Innovation urged Congress in an Oct. 15 letter to retain electric vehicle tax credits, calling them “critical to solidifying the United States as a global leader” in the future automobile manufacturing.
Trump’s transition team did not comment on the fate of the electric vehicle tax credit, but said in a statement that the president-elect would keep “the promises he made on the campaign trail.”
Trump campaigned on ending Biden’s “EV mandate,” without spelling out specific targeted policies. The energy-focused transition team has determined that some of Biden’s clean energy policies will be difficult to end because they are popular and already funnel money to Republican-dominated states, the sources said .
The team views the electric vehicle credit as an easy target, believing its elimination would gain broad consensus in a Republican-controlled Congress.
Trump could use savings from eliminating the credit to help finance the extension of the multibillion-dollar tax cuts from his first term, which are set to expire soon, the two sources said. Congressional Republicans are considering passing the broader tax bill as one of their first actions.
Members of the energy transition team expect the Republican Congress to roll out legislation known as reconciliation to avoid relying on Democratic votes. Biden used the same tactic to pass the IRA.
Eliminating electric vehicle tax credits is strongly supported by Hamm, a longtime Trump supporter, as well as the entire oil and gas industry.
Trump promised during his campaign to boost U.S. oil production, even though it has reached record levels, and to roll back Biden’s clean energy initiatives, which also include subsidies for wind power and solar and mass production of hydrogen.