GOP leader confirms plan to kill $7,500 EV tax credit in budget
Republican House Speaker Mike Johnson confirmed that current discussions about the $7,500 federal tax credit for electric vehicles in the budget would “more likely than not” result in killing the EV incentive.
The US Congress is back from its April pause, and negotiations over the federal budget continue.
As part of the new budget, the Trump administration is pushing for further tax cuts that the new tariffs can’t compensate for. This will lead to an even bigger deficit, which Trump campaigned on fixing.
Elon Musk’s DOGE effort was supposed to cut $2 trillion in expenses, but the target has since been revised to $150 billion by 2026.
It’s now up to Congress to cut, and the federal tax credit has long been a target for Republicans, who now control the Senate, the House, and the White House.
Today, House Speaker Mike Johnson gave an update on the negotiations and said that they are more likely than not going to kill the EV tax credit (via Bloomberg):
“I think there is a better chance we kill it than save it. But we’ll see how it comes out.”
Most experts agree that Trump’s proposed tax cuts will increase the US deficit by at least $4.5 trillion over the next decade.
In 2024, the federal government is estimated to have spent about $2 billion in advance point-of-sale EV tax credit payments.
It’s less than a drop in the bucket.
Electrek’s Take
This is more about politics than about fiscal responsibility.
The tariffs amount to a giant tax increase on the entire US population, while Trump’s proposed tax cuts are structured to benefit the top 1% the most. The top 1% earners in the US are expected to get about 25% of the total benefits from the tax cuts, while the top 5% should get nearly half.
Meanwhile, the US has a growing debt problem, and these tax cuts would add to the deficit.
But not to worry. Cutting $2 billion a year in spending on electric vehicles, which helps the US not fall too far behind the rest of the world in the critical electrification of the auto industry, one of the last major manufacturing industries in the US, will help close the gap.
It would be funny if it weren’t such a serious issue.
That said, we knew it was coming since the elections. The main question is about timing. The budget is now expected to pass at some point between the end of May and the end of July.
If the EV tax credit is indeed removed, there should be a grace period. The GOP has already proposed a few pieces of legislation over the last year, and some included provisions to retain access to the credit until the end of the year, while others would end it by the end of the following month after the legislation passes.
The latter would certainly be problematic, but it would boost EV sales in the US as buyers would try to take advantage of the credit before it goes away.
As the biggest EV automaker in the US, Tesla would likely be the most affected by the end of the tax credit.
In the short term, companies like Rivian and Lucid wouldn’t hurt too much, as most EVs in their lineups are too expensive to have access to the tax credit, but it would hurt the prospects for their upcoming cheaper electric vehicles, like Rivian’s R2 launching next year.
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Slate Auto, a new EV startup backed by Jeff Bezos, has poached a key Tesla manufacturing leader to build its electric pickup truck factory in Indiana.
Napoleon Reyes is a US Marine from Indiana who got a degree in mechanical engineering from Purdue after leaving the force.
He then worked a few years at Subaru and Wabash before joining Tesla’s manufacturing team at the Fremont Factory in 2020.
There, he became part of the Model Y production ramp and was quickly promoted to lead the Model Y General Assembly in Fremont in 2022.
Reyes led Model Y GA, one of the most critical parts of vehicle manufacturing, for more than a year before being promoted again to lead new pilot processes at the factory.
Most recently, he led the launch of the general assembly line for the Model Y refresh.
The new engineering manager announced this week that he is leaving Tesla to join Slate:
A bit late on the post but after nearly 5 years working at Tesla in Fremont, I made the difficult decision to leave the Company and move closer to home with my family. It was an incredible experience being part of multiple line expansions and multiple Model Y program launches. Leading and managing the Model Y Refresh launch for GA in Fremont this year tested me professionally however we ultimately succeeded due to our amazing cross functional team collaboration. It’s been an absolute pleasure working with such great people, and I will forever be proud and thankful for everything we accomplished together.
I will be taking on a new role as Senior Manager, Plant Vehicle Engineering at Slate Auto in Warsaw, In.
Slate emerged from stealth mode earlier this year to unveil a new type of electric pickup truck featuring modular customization and an affordable price.
The company raised over $700 million through two rounds of investments from several different investors, including Jeff Bezos. It is currently raising more, which basically guarantees that it will be able to reach production.
The startup acquired a former printing plant in Warsaw, Indiana. It is currently converting to manufacture its electric pickup with a team from legacy automakers and also several former engineers and leaders from Tesla.
Rich Schmidt, an early Tesla manufacturing director, is the head of manufacturing.
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Genesis is preparing to shake things up with its most luxurious SUV yet, the GV90. Thanks to a new patent filing, we are getting a detailed look at how its Rolls-Royce-style coach doors will work.
New patent reveals Genesis GV90 coach door system
When Genesis first unveiled the full-size SUV at the NY Auto Show last March, it wasn’t the stunning design or advanced tech that caught everyone’s attention. It was the coach doors.
Although we were worried it wouldn’t make it to the production model, like many concepts, the Genesis GV90 will be offered with coach doors.
The ultra-luxe electric SUV was first caught with coach doors earlier this year on a car carrier in South Korea. Just last month, the GV90 was spotted in California with a hinge at the rear to open the coach doors.
After several new patents were filed with the United States Patent and Trademark Office for new door latching devices, we are getting a sneak peek at how they are expected to work.
The patents, titled “Cinching Device For Door Latches in Vehicle,” and “Door Latch Device for Vehicles,” give a pretty detailed explanation of how the Genesis GV90’s coach doors will operate. The “Door Latch Device” uses a door striker on the lower side of the door, which is opened or closed by a hinge unit.
Unlike traditional doors, which use the B-pillar for support, the device is attached directly to the door itself, allowing for hinge-like movement.
The cinching device works in a similar way. It’s also attached to the door and part of the vehicle. However, unlike most of its kind, Genesis found a way to use a single cinching device to control multiple units. Again, the device is used for B-pillarless doors that swing open.
Genesis already said that B-pillarless coach doors are now feasible in production vehicles. The patent reveals a glimpse into how the luxury automaker could make it a reality.
Although the Genesis GV90 is expected to be offered with coach doors, they will likely not be standard. Other variants, with traditional door handles, have also been spotted testing in the US and South Korea.
Genesis is expected to launch the GV90 in mid-2026. It will be built at Hyundai’s Ulsan plant in South Korea. The flagship Genesis SUV is scheduled to debut on Hyundai’s new eM platform, which the company said will “provide 50% improvement in driving range.” It will also be loaded with the latest technology, software, connectivity, and Level 3 or higher autonomous driving capabilities.
Source: USPTO
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Environment
Podcast: Tesla Model YL, more Tesla probes and lawsuits, new Nissan Leaf pricing, and more
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the launch of the Tesla Model YL, more Tesla probes and lawsuits, new Nissan Leaf pricing, and more.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
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Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET:
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