Lucid Motors CEO Marc Winterhoff has urged Congress to preserve the $7,500 federal electric vehicle (EV) tax credit, warning that its elimination could cripple startups like his in a competitive market. As the Senate prepares to vote on a bill that would end the credit by mid-2025, Winterhoff’s plea underscores the high stakes for emerging EV makers, according to Noticias de Automoción.

Senate’s Push to End EV Incentives

The Senate’s tax bill, pending approval and President Trump’s signature, would terminate the $7,500 EV tax credit by June 2025, six months sooner than the House’s plan to phase it out by 2026. This credit has been instrumental in driving EV adoption, famously fueling Tesla’s rise to a $1 trillion valuation. Lucid, with just 10,000 vehicles sold in 2024 and losses exceeding $3 billion, relies on the credit to make its upcoming Gravity SUV and a 2026 crossover more affordable. The move has drawn sharp criticism, with Tesla CEO Elon Musk calling the cuts “incredibly destructive” to U.S. innovation.

Lucid’s Strategy at Risk

Lucid’s Air sedan, too pricey for the credit when bought new, qualifies through leasing, though former CEO Peter Rawlinson noted last year that Lucid’s affluent customers often exceed income caps. The credit’s end jeopardizes plans to attract budget-conscious buyers with the Gravity SUV, expected soon, and a smaller crossover, potentially priced around $50,000. Without the incentive, Lucid’s growth could stall, further pressuring a company whose stock has crashed nearly 80% since 2021, now trading at about $2 per share, backed by Saudi Arabia’s sovereign wealth fund.

Broader Industry and Economic Impacts

The tax credit has propelled U.S. EV sales to 1.1 million in 2024, per Department of Energy estimates. Its removal could dampen demand, hitting startups like Lucid, Rivian, and Fisker hardest, as they lack Tesla’s scale. The credit’s 2024 point-of-sale adjustment, enabling dealers to apply it directly, broadened access for middle-class buyers. Ending it risks slowing job growth in the EV sector, which supports over 200,000 U.S. workers, and could weaken domestic manufacturing. Winterhoff’s stance echoes Musk’s warning that the bill threatens “millions of US jobs” by favoring outdated industries.

Regulatory Shifts and Political Realities

The Senate’s plan aligns with a Republican-led shift toward traditional energy, reversing Biden’s 2024 reforms that prioritized U.S.-made EVs and curbed Chinese battery use. The credit once favored wealthy buyers, enabling Tesla’s early success but sparking debate over subsidizing the rich. Jalopnik suggests Winterhoff’s fairness plea seems completely “delusional” given Congress’s priorities. With China’s 9.7 million EV sales in 2024, driven by subsidies, the U.S. risks losing ground if incentives vanish, potentially hindering 2030 emissions targets.

A Critical Juncture for EV Startups

Winterhoff’s call to save the credit, alongside Musk’s vocal opposition, highlights the urgency for EV startups. With Lucid’s 10,000 sales far below the credit’s 200,000-vehicle cap, the incentive remains vital for its future. As Congress debates, the decision will shape whether companies like Lucid can compete or falter under financial and regulatory strain.