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 $2 billion a year in spending on electric vehicles, which helps the US not fall too far behind the rest of the world in the critical electrification of the auto industry, one of the last major manufacturing industries in the US, will help close the gap.
It would be funny if it weren’t such a serious issue.
That said, we knew it was coming since the elections. The main question is about timing. The budget is now expected to pass at some point between the end of May and the end of July.
If the EV tax credit is indeed removed, there should be a grace period. The GOP has already proposed a few pieces of legislation over the last year, and some included provisions to retain access to the credit until the end of the year, while others would end it by the end of the following month after the legislation passes.
The latter would certainly be problematic, but it would boost EV sales in the US as buyers would try to take advantage of the credit before it goes away.
As the biggest EV automaker in the US, Tesla would likely be the most affected by the end of the tax credit.
In the short term, companies like Rivian and Lucid wouldn’t hurt too much, as most EVs in their lineups are too expensive to have access to the tax credit, but it would hurt the prospects for their upcoming cheaper electric vehicles, like Rivian’s R2 launching next year.
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Just one year after ZEEKR went public on the US stock market, its majority shareholder, Geely, is offering the Chinese EV automaker an opportunity to go private once again.
As we’ve pointed out several times in the past (especially the last month or so), Chinese EV automaker ZEEKR ($ZK) continues to build momentum overseas as it gears up to continue expanding its presence to new markets around the world (just not in the US yet, sorry).
We recently visited Shanghai and Hangzhou in China, where ZEEKR was our host. At the Shanghai Auto Show, we explored the automaker’s entire lineup on the showroom floor and also got a rare opportunity to drive ZEEKR EVs on public roads in China, which we were quite impressed with.
Several other brands under the Geely umbrella, including Lynk & Co., were also present during that drive day. Geely currently owns approximately 65.7% of ZEEKR and is now hoping to make that investment whole, as it has proposed that the automaker delist in the US and become a private company.
ZEEKR has option to delist in US and become wholly-owned by Geely
As reported by CnEVPost, Geely Automobile Holdings submitted a non-binding offer to ZEEKR today, proposing to delist it from the Nasdaq in the US and take the Chinese EV automaker private. That letter was confirmed via an announcement from the Hong Kong stock exchange.
In May 2024, ZEEKR went public in the US on the NYSE under the ticker symbol “ZK,” trading as American depositary receipts (ADRs). Then, in November of 2024, Geely increased its stake in ZEEKR after a musical chairs restructuring in which the latter acquired 21% of Lynk & Co from the former and its 30% stake in Volvo Cars. As a result, Geely owns about 65% of ZEEKR.
As the majority shareholder, Geely now wants ZEEKR to delist from the US stock market so it can wholly acquire it to “drive resource consolidation, avoid duplication, reduce costs, and build long-term value.”
According to the non-binding proposal letter filed today, Geely is offering to acquire all issued and outstanding ZEEKR shares and ADSs at a proposed purchase price of $2.57 per share or $25.66 per ADS. The proposed purchase of the remaining 34.3% of the automaker would equate to about $2.2 billion from Geely without any evident hurdles to continuing business as usual.
Instead, Geely hopes to create a unified listing platform and consolidate the automaker’s assets and resources to become more competitive in the passenger EV segment and, per Geely, help “define ZEEKR’s future strategic direction to address global market and economic challenges.”
ZEEKR’s stock in the US is currently up following news of Geely’s privatization plans. We’ve contacted ZEEKR for a comment, and were sent the following release from Geely.
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Finally, Mitsubishi is bringing a new EV to the US. Mitsubishi confirmed plans to launch a new EV in North America that will be based on the next-gen Nissan LEAF. Here’s what we know so far.
Mitsubishi will use the Nissan LEAF for its new EV
Earlier this year, Mitsubishi told US dealers (via Automotive News) that a new EV would arrive in 2026. Sources said the new electric car will closely resemble Nissan’s updated LEAF.
The company officially announced its upcoming EV on Tuesday, giving us a better idea of what to expect. Mitsubishi confirmed its upcoming EV will, in fact, be based on the new Nissan LEAF. The Japanese automakers will work together to launch it across the US and Canada as part of Mitsubishi’s long-term growth plan.
Nissan revealed the third-gen LEAF in March, upgrading it in nearly every way. The new Nissan LEAF drops the iconic hatch design for a crossover and includes a native NACS port to access Tesla Superchargers.
Based on its CMF-EV platform, the same one underpinning its electric SUV, the Ariya, Nissan’s new LEAF has “significant range improvements.”
Although official specs will be revealed soon, Nissan’s vehicle program chief, Francois Bailly, told TopGear.com that the new LEAF is expected to have a WLTP driving range of up to 373 miles (600 km).
The updated LEAF will arrive in the US and Canada later this year as one of ten new or refreshed vehicles from Nissan and its luxury Infiniti brand.
As part of its North American growth strategy, dubbed Momentum 2030, Mitsubishi will launch “a new or significantly revised vehicle every year between 2026 and 2030,” starting with the 2025 Outlander.
Mark Chaffin, president and CEO of Mitsubishi’s North American operations, said after launching the new business plan (Momentum 2030), dealers were asking “for more concrete timing and plans.”
Chaffin added that today’s announcement “is the first of many to come that reinforce our commitment to the US market. “
Mitsubishi’s North American sales rose 11% year-over-year (YOY) in the first quarter to 31,637 units. Chaffin said the new EV will diversify its lineup with “a blend of internal combustion engines, plug-in hybrids and electric vehicles.” The company will share more details, including prices and specs, closer to launch in Summer 2026.
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Another day, another exciting post from Rivian founder and CEO RJ Scaringe sharing images of the upcoming R2 EV. This is the third R2 update from Rivian in as many days, as the American automaker’s second flagship model configuration inches closer to full-fledged production.
As we pointed out earlier this week, Rivian ($RIVN) continues to succeed by selling its first two flagship models—the R1S and R1T, which are now in the second generation. The automaker’s Q1 2025 report, posted yesterday, solidified that statement, detailing gross profits for a second consecutive quarter that have unlocked a $1 billion investment from joint venture partner Volkswagen Group.
Another interesting update from yesterday’s shareholder letter was progress on the Rivian R2 – a smaller, more affordable BEV that has already secured hundreds of thousands of pre-orders and could very well enable Rivian’s “Model 3 moment.”
Per Rivian, R2 validation builds are underway in Normal, Illinois, and are on track for scaled production next year. Just hours after the quarterly report went public, Rivian CEO RJ Scaringe shared some images of the validation R2 builds on social media, offering our best look at its development progress yet.
R2 images look cool, but don’t get too excited about its wheels
The two Rivian R2 images above were posted by Scaringe on X yesterday evening with the following caption:
Validation builds for R2 are progressing on our pilot line!! Can’t wait for R2!!
The images join a picture of Rivian’s new Maximus drive unit, which will power the R2 BEVs, which Scaringe shared earlier this week. While drive units are exciting to hardcore BEV enthusiasts, especially when you think of the cost-per-unit savings the lighter and optimized assembly Maximus unit will offer, but most people want to see a physicaly BEV body to ogle. Scaringe delivered.
The images of the validation R2 builds showcase tremendous progress for Rivian as it looks to deliver a smaller and more affordable model to the masses. Judging by the number of reservations, those consumers are ready.
Most of the reactions to Scaringe’s post were excited. One user asked for more details about the R2’s all-black wheels seen in the image above, to which Scaringe responded that they are only for Rivian development vehicles, so don’t expect to see them in the Gear Shop—unless, perhaps, you keep spamming the CEO about it until they add them!
Less friendly comments pertained to the build quality of the R1T and R1S models currently rolling out of Rivian’s Normal facility, imploring RJ and his team to spend more time on quality control before deliveries. I’ll admit that my R1S came with a couple of early cosmetic and software hurdles, but it’s been smooth sailing since.
I’d also argue that Rivian is already assembling and delivering better quality builds than Tesla, which has been in the production game a lot longer. You don’t see many (or any?) Rivians with mismatched paint panels, but I digress.
Rivian will have plenty of time to get all the production bugs out in Normal as it continues progressing on its new 1.1 million-square-foot manufacturing expansion, which will be home to R2 production next year. For now, we will keep an eye on RJ’s accounts to see what exciting R2 images he and Rivian will share next. Stay tuned.
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