Republicans in the US House are more likely than not to kill a consumer tax credit for electric vehicles, according to Speaker Mike Johnson.
“I think there is a better chance we kill it than save it,” Johnson said in a Tuesday interview. “But we’ll see how it comes out.”
Eliminating the popular tax credit of as much as $7,500 for consumers who purchase an EV has been a prime target for Republicans looking for ways to help pay for President Donald Trump’s massive tax-cut package.
The credit was expanded in former President Joe Biden’s sweeping climate law to include used and commercial vehicles. Its cost is projected to balloon from an initial estimate of $12.5 billion made by the Congressional Budget Office in 2022. An analysis by consulting firm Capital Alpha Partners in March said the credit’s 10-year cost could total more than $200 billion.
The debate also comes as Trump has railed against EVs and his administration has begun the process of undoing scores of Biden’s environmental and climate policies, while promoting fossil fuels such as oil, gas and coal. Earlier this month, Republicans moved a step closer to repealing a federal waiver allowing California to ban gasoline-powered cars by 2035.
The fate of the EV tax credit, and the resulting impact on manufactures such as Elon Musk’s Tesla Inc., Rivian Automotive, Inc., General Motors Co. and Ford Motor Co., is in the air as the House is set to detail their plan for the future of hundreds of billions in energy tax credits for sources such as solar, wind, nuclear power, and carbon capture.
Johnson said details of lawmakers’ plan for the energy credits would be revealed later this week, but he acknowledged the difficulty in reaching a consensus on the fate of those credits, as well as the EV credit. One issue is that many EV factories have been built or are under construction in GOP districts.
A growing number of House Republicans have expressed support for keeping some clean energy tax incentives. Last week, 26 of the lawmakers sent a letter to the chair of the House’s tax writing committee asking that breaks for nuclear and clean electricity credits be spared. In total, 38 House Republicans have voiced support for keeping Inflation Reduction Act clean energy incentives, according to a May 2 note by ClearView Energy Partners, a Washington consulting firm.
In all, House Republicans are aiming for a total of $2 trillion in spending reductions paired with a $4.5 trillion in reduced revenue from tax cuts.
