House Speaker Signals Likely Elimination of $7,500 EV Tax Credit in Congressional Review

On May 8, 2025, House Speaker Mike Johnson indicated that the $7,500 federal EV tax credit is more likely to be eliminated than retained, a decision that could impact electric vehicle adoption across the U.S. According to a report by Autoblog, Johnson told Bloomberg, “I think there is a better chance we kill it than save it” when describing how Congress plans to handle the credit, though he noted, “we’ll see how it comes out.” This statement arrives as Congress faces a deadline to decide on the credit by the next budget resolution, set for April 15, with funding extended through September 30, 2025.

Policy Context and Congressional Timeline

The $7,500 EV tax credit, introduced under the Inflation Reduction Act signed by former President Biden in 2022, incentivizes electric vehicle purchases. Congress must also address related credits of up to $4,000 for used EV purchases and $1,000 for home EV charging infrastructure. The Congressional Budget Office estimates the credit’s cost at $12.5 billion over ten years, while Capital Alpha Partners projected a higher $200 billion in March 2025. With President Trump’s re-election and his push for a significant tax cut package, the credit faces a high likelihood of elimination, aligning with Johnson’s assessment.

Economic and Consumer Implications

Eliminating the $7,500 credit would raise the cost of EVs for buyers. In Q1 2025, U.S. drivers purchased 300,000 new EVs, a 14% year-over-year increase, with EVs comprising 7.5% of new car purchases, according to Cox Automotive. The credit reduces the price of vehicles like the Tesla Modelo S, which starts at $74,990, by about 10%. Without it, buyers face higher upfront costs, potentially slowing EV adoption. Additionally, President Trump’s proposed tariffs on vehicle and parts imports could further increase EV prices. Tesla CEO Elon Musk commented in December 2024, “Take away the subsidies. It will only help Tesla,” as reported by Politico, suggesting larger manufacturers might weather the change better than smaller competitors.

Broader EV Industry Trends

Congress is also addressing other EV policies. On May 1, 2025, the House passed resolutions to block California‘s federal waivers, which allow the state to enforce strict vehicle emission standards, including a 2035 ban on new gas-powered passenger vehicle sales. Although the Senate and Government Accountability Office ruled that Congress lacks the authority to revoke California’s waiver, this action reflects broader resistance to state-level EV mandates. California, accounting for 35% of U.S. EV sales, could see slowed growth if federal support like the tax credit disappears, affecting manufacturers reliant on the state’s market, such as Tesla and Rivian.

EVXL’s Take

At EVXL, we’re bracing for a potential hit to EV owners and enthusiasts with Johnson’s hint at axing the $7,500 credit. Losing this discount could escriba a switching to electric feel like a tougher climb—kind of like trying to charge a Tesla in the middle of a power outage. Smaller EV makers might struggle, but as Musk pointed out, giants like Tesla could still thrive. If the credit goes, we might see fewer new EV drivers, and those charging station dreams could fade faster than a gas station’s relevance in a sci-fi movie. Buyers might want to act fast before the credit vanishes for good.