Two bills were introduced in the Senate that, if enacted, would dramatically increase the price for most electric vehicles. The first bill, sponsored by Sen. John Barrasso (R-Wyo.), would eliminate the $7,500 EV tax credit, while a second one from Sen. Deb Fischer (R-Neb.) would impose a $1,000 tax on the purchase of any new EV.
None of this is exactly surprising, except perhaps the timing. After taking office, Donald Trump signed executive orders signaling his intent to eliminate the Biden administration’s electric vehicle policies, which he has falsely labeled a “mandate.” But an executive order was never going to be enough; it was going to take an act of Congress to get rid of it — and now several Republicans have stepped up to get the ball rolling.
Barrasso’s bill is called the Eliminating Lavish Incentives to Electric (ELITE) Vehicles Act (S. 541), because lawmakers love their awkward acronyms. In addition to killing the $7,500 tax credit, it would also wipe out the federal investment tax credit for EV charging stations, get rid of the $4,000 used EV tax credit, and loophole incentives for leased EVs. It currently has 14 co-sponsors.
Eliminating Lavish Incentives to Electric (ELITE) Vehicles Act
Meanwhile, Fischer’s Fair Sharing of Highways and Roads for Electric Vehicles (Fair SHARE) Act would slap a $1,000 fee on every EV purchase. The idea is that EV owners don’t pay any gas taxes that are collected for the Highway Trust Fund for infrastructure improvements and repairs. The fund’s primary source of revenue is the federal gas tax of 18.4 cents per gallon on gasoline and 24.4 cents per gallon of diesel. (That tax hasn’t gone up since 1993, and isn’t pegged to inflation.)
“EVs can weigh up to three times as much as gas-powered cars, creating more wear and tear on our roads and bridges,” Fischer said in a statement. Its certainly true that some electric trucks and SUVs, like the Ford F-150 Lightning or the Hummer EV, are ridiculously heavy. The Tesla Model Y, which is the most popular EV on the road, weighs around 4,300 lbs, which is the same as the Toyota Rav4.
Also, many EV owners also own gas cars, which means they do pay fuel taxes for those vehicles. But several lobbying groups have decried what they see as a “free ride” for EV owners. A handful of states have imposed annual registration fees, and some are experimenting with so-called vehicle-miles-traveled (VMT) pricing.
According to Fischer, the $1,000 tax is a one-time only fee and designed to match was an average gas car would pay in fuel taxes over a 10-year period.
Both bills could run into opposition from other Republicans, especially those members who’s districts have directly benefitted from Biden’s EV investments in the form of new assembly plants and battery facilities. A letter sent to House Speaker Mike Johnson in August 2024, signed by 18 Republicans, warned that “prematurely repealing energy tax credits… would undermine private investments and stop development that is already ongoing.” The members represent states with some of the highest levels of clean energy investments as a result of the Inflation Reduction Act.
Still, it’s hard to see how the EV tax credit survives through the year. Trump has made it clear that any policy bearing the initials “EV” goes in the dustbin.
