Trump Examine Tax Credit
President-elect Donald Trump’s transition team is reportedly targeting the $7,500 electric vehicle (EV) tax credit, a key part of the Biden administration’s strategy to promote clean energy and reduce greenhouse gas emissions.
According to sources, North Dakota Governor Doug Burgum and oil magnate Harold Hamm—both key players on Trump’s energy transition team—are leading efforts to roll back the credit as part of a larger overhaul of federal tax policies. Their goal? Repeal the credit to offset tax reductions and potentially make Trump’s 2017 tax cuts permanent.
The EV tax credit, part of Biden’s broader Inflation Reduction Act, has fueled rapid growth in the EV market and been pivotal to his administration’s environmental agenda. However, Trump’s team has made clear its intent to reverse many of Biden’s green energy policies, and eliminating the EV tax credit aligns with Trump’s campaign promises to dismantle these regulations. The decision, if pursued, would affect not only electric vehicle manufacturers but also consumers, whose purchases have surged as more affordable EV options emerge.
Interestingly, one of Trump’s prominent supporters, Tesla CEO Elon Musk, has previously endorsed eliminating the EV tax credit. Musk argues that Tesla is positioned to survive—and possibly even thrive—without subsidies, while smaller competitors would likely struggle. During a July earnings call, Musk remarked that ending the tax credit “would be devastating for our competitors and for Tesla slightly,” though he believes it would “probably actually help Tesla” in the long run by making the market less reliant on government incentives.
Musk has consistently argued for eliminating all government subsidies, from EV credits to oil and gas subsidies, advocating instead for a free-market approach that fosters competitiveness without relying on taxpayer dollars.
In addition to scrapping the EV tax credit, Trump’s team is reportedly considering repealing Biden’s tailpipe emissions regulations, which require automakers to meet stricter emission standards. These rules, implemented by the Environmental Protection Agency (EPA), are designed to push automakers toward producing more EVs by limiting emissions on traditional internal combustion vehicles. Critics argue that the regulations place undue financial burdens on the auto industry and make electric vehicles the de facto choice for consumers, regardless of their preference.
Rep. Cathy McMorris Rodgers, Chair of the House Energy and Commerce Committee, has voiced strong opposition to Biden’s tailpipe emissions rules, framing them as coercive and economically unsound. “The EPA’s latest tailpipe emissions rule is not really about reducing air pollution.
It’s about forcing Americans to drive electric vehicles,” she stated earlier this year, echoing concerns that these mandates risk undermining American automakers while benefiting foreign economies, particularly China. Rodgers argued that the “rush-to-green” approach is jeopardizing the U.S. auto industry by pushing EV mandates before the technology becomes affordable and accessible for the average consumer.
Eliminating the EV tax credit and emissions regulations would mark a major shift in U.S. energy and environmental policy. It would reinforce Trump’s vision of a domestic energy sector less constrained by green mandates and more focused on traditional sources, like oil and gas, which have a significant base of support within his administration. By potentially removing these subsidies, Trump’s team aims to curtail the government’s influence on consumer choice in the auto market, allowing market forces to determine which technologies thrive.