US to axe EV tax credits

Tax credits designed to incentivise the uptake of EVs in the United States will be axed from the end of September after a wide-ranging bill was passed by the US Congress.

The House of Representatives voted 218 to 214 on July 3 (US time) to pass President Donald Trump’s “big, beautiful bill”, which is designed to cut taxes and spending. 

It will mark an end to many Biden-era incentives and includes ditching the US$7,500 (about NZ$12,300) new EV tax credit and the US$4,000 used EV tax credit after September 30.

Dealers and carmakers had hoped for a longer timeframe for phasing out the credits, which have been cited by consumers as a key reason for buying EVs over the past 18 months.

The new bill will also eliminate fines for manufacturers that fail to meet certain fuel economy standards, reports Automotive News.

Carmakers have followed the corporate average fuel economy standards since 1975, which has made them steadily improve fuel economy to avoid financial penalties for a lack of compliance.

Commentators fear the lack of an enforcement mechanism will lead to many companies shelving proven and cost-effective technologies.