Oil-backed senators introduce bills to kill $7,500 EV tax credit, add $1,000 tax on electric cars
Republican Senators have introduced bills to not only kill the $7,500 tax credit for electric vehicles but also add a $1,000 tax at the purchase of new EVs.
President Trump campaigned on killing the $7,500 tax credit for electric vehicles. Therefore, it’s not surprising that it’s happening, but now we have a better idea of how.
Senator John Barrasso, along with 14 other GOP senators, has introduced a pair of bills going after electric vehicles.
The first one, unsurprisingly, would end the federal tax credit for electric vehicles, which includes the $7,500 credit for buying or leasing a new electric car, the $4,000 tax credit for used electric vehicles, and the incentives for charging stations.
Some hoped that legislators would push to end the tax credit for next year, which would have helped EV sales in the US in 2025, but the bill, as it stands, says that the credits would end 30 days after it is signed into law.
The second bill, sponsored by Senators Deb Fischer, Pete Ricketts, and Cynthia Lummis, would add a one-time $1,000 fee to the purchase price of a new electric vehicle.
GOP senators justify this by pointing out the lack of contributions from electric vehicles to fund the repair and maintain of highways, which is thought to be financed through taxes on gas and diesel. They arrive at $1,000 by calculating roughly the average contribution of a gas-powered car through the gas tax over 10 years.
Fischer said:
“EVs can weigh up to three times as much as gas-powered cars, creating more wear and tear on our roads and bridges.”
The most popular gas car in the US is the Toyota Corolla, which weighs about 3,000 lbs—or about 800 lbs less than a comparable electric Tesla Model 3—but it’s nowhere near three times heavier.
It’s worth noting that Fischer took $356,393 from the oil and gas industry during the last election cycle. It is one of her top contributors.
As for Barrasso, he takes even more money from the oil and gas industry: $781,381 during the last cycle.
Trump’s recently appointed Transportation Secretary Sean Duffy had signaled plans to impose new fees on electric vehicles.
Electrek’s Take
I’ve made my peace with the tax credit going away in the US. It’s going to cripple the country’s EV market, which is already way behind the rest of the world, but it sounds like Americans are OK giving up the lead on that front. So be it.
I was hoping that the change would be announced for the end of the year, creating some urgency to by this year – boosting sales in 2025, but it sounds like that won’t happen.
But the $1,000 fee is about as dumb as it gets. It doesn’t account for a vehicle’s size, weight, or efficiency. It’s a flat fee for everyone regardless of how much or how little they use the car. It makes no sense, and it is clearly meant to discourage electric vehicles.
If the GOP passes this legislation, it will sabotage its entire auto industry long term, including Tesla. They will lose EV expertise to the rest of the world.
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Tesla average transaction prices (ATPs) in March are estimated at $54,582, higher year-over-year by 3.5% and higher than in February, according to the latest monthly new-vehicle ATP report from Cox Automotive’s Kelley Blue Book.
Average transaction prices for the Tesla Model 3 and Model Y were higher month-over-month and year-over-year in March. Tesla’s sales in Q1 continued their long-term decline after peaking in Q1 2023. Estimates from Kelley Blue Book suggest Tesla’s sales in Q1 2025 were lower year-over-year by more than 8%. Its deliveries were also worse than expected.
New EV prices in March overall are initially estimated by Kelley Blue Book to be $59,205, higher year-over-year by 7.0%. New EV prices increased from the revised higher February ATP of $57,015.
The ATP for an EV last month was nearly 25% higher than the industry average of $47,462, widening the price gap between new EVs and gas-powered cars even more.
But EVs are still seeing heftier incentives than the industry average. In March, the average EV incentive came in at 13.3% of the transaction price – down 1% from February’s revised 14.3% but still well above what gas cars are getting.
So, where are we heading? Higher prices, thanks to Trump’s tariffs. But what that will look like remains to be seen. Erin Keating, executive analyst at Cox Automotive, said, “All signs point to higher prices this summer, as existing ‘pre-tariff’ inventory is sold down to be eventually replaced with ‘tariffed’ inventory. How high prices rise for consumers is still very much to be determined, as each automaker will handle the price puzzle differently.”
Read more: EV incentives surged to 14.8% of ATP in Feb – highest in 5+ years
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BYD just launched the first EVs based on its new Super e-platform with ultra-fast charging. The new Han L sedan and Tang L SUV can gain nearly 250 miles range in 5 minutes, and prices start at just $30,000.
Meet BYD’s new EVs with ultra-fast charging
During a launch event on April 9, BYD introduced the new EV models, claiming its engineers have “achieved the master realm of Chinese technology.”
The Han L and Tang L are the first EVs based on BYD’s 1000V Super e-platform. After unveiling the ultra-fast EV charging platform last month, BYD’s CEO, Wang Chuanfu, said to ease charging anxiety, “The ultimate solution is to make charging as quick as refueling a gasoline car.”
That solution is now here. BYD’s new Han L is available in three trims, starting at just 219,800 yuan ($30,000), lower than the pre-sale price of 270,000 yuan ($36,800).
BYD’s new electric sedan is 5,050 mm long, 1,960 mm wide, and 1,505 mm tall, or about the size of a Tesla Model S (5,021 mm long, 1,987 mm wide, and 1,431 mm tall).
All variants are powered by an 83.2 kWh BYD Blade battery, providing up to 435 miles (701 km) of CLTC driving range. Based on BYD’s 1,000V architecture, the Han L comes with two charge guns with an up to 10C charge rate.
Nearly 250 miles in just 5 minutes?
With ultra-fast charging, the electric sedan can gain 400 km (248 miles) in just five minutes. In six minutes, it can recharge from 10% to 70%, and in just 20 minutes, it can fully recharge (0% to 100%) the battery.
Like all its new EV models, the Han L is equipped with BYD’s God’s Eye smart driving assist system. It features the mid-tier “B” version and DiPilot 300.
BYD’s new electric SUV, the Tang L, is also offered in three trims. It starts at 239,800 yuan ($32,700), also below the pre-sale price of 280,000 yuan ($38,200).
The Tang L is also based on BYD’s 1,000V architecture and ultra-fast charging platform. Powered by a 100.5 kWh battery, it has a CLTC range of up to 435 miles (701 km) and can gain 230 miles (370 km) in 5 minutes. It will take about 30 minutes to go from 0% to 100%.
BYD’s electric SUV is 5,040 mm long, 1996 mm wide, and 1,760 mm tall, or slightly bigger than the new Tesla Model Y Juniper in China (4,797 mm long, 1,920 mm wide, and 1,624 mm tall).
Like the Han L EV, the electric SUV has BYD’s God’s Eye B ADAS system with DiPilot 300. Both the Han L and Tang are available as PHEVs, starting at 209,800 yuan ($28,500) and 229,800 yuan ($31,300).
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The fintech sector is rallying Wednesday following the Trump administration’s announcement of a 90-day pause on planned tariffs.
Affirm was up 20%, Toast and Block rose 13% and PayPal increased 10%.
The 90-day pause doesn’t eliminate the threat of tariffs — it just delays it. Investors are still pricing in risk, including inflation, discretionary pullbacks, hardware import costs and credit exposure.
Legacy payment networks such as Visa and Mastercard, both up 6%, continue to benefit from inflation and their structural ties to nominal GDP. These companies take a percentage of every transaction. That makes rising prices a tailwind.
“If prices are moving up for certain goods and you’re paying with a credit card, it’s actually good for the credit card companies,” said Dan Dolev, a fintech analyst at Mizuho.
Their pricing structure has historically made them resilient during inflationary periods, including recessions. The situation is less rosy for the new wave of consumer lending fintechs.
Affirm, which specializes in allowing consumers to buy now and pay later, could suffer if consumers pull back spending when the pause is lifted as a result of tariffs causing prices to rise. The San Francisco-based company could see its revenue less transaction costs margins — essentially what the company pockets after paying processing fees and customer incentives — drop more than 22% in that scenario, according to a Goldman Sachs estimate on Tuesday.
The adoption of buy now, pay later may rise as consumers hit credit limits, said SIG analyst James Friedman, but he added that the model remains untested in a downturn.
Toast, Block and Fiserv, which was up 6%, develop software used by restaurants and small businesses. Those companies could face rising hardware costs and softening demand from customers if the tariffs go through.
Meanwhile, cross-border payments — one of the most profitable segments for Visa, Mastercard and PayPal — remain under pressure as global travel slows and e-commerce flows adjust to the uncertainties of Trump’s tariffs.
Even remittance players such as Remitly and Western Union, both up 8%, could face longer-term pain if immigration pipelines slow or remittance corridors tighten under regulatory scrutiny. Similar to cross-border commerce, remittances depend on a steady flow of people and transactions, both of which remain fragile.
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