Trump Tax Bill Axes $7,500 EV Tax Credit, Sparks Musk’s Fury

On Saturday, June 28, 2025, Elon Musk, CEO of Tesla Inc., publicly condemned the U.S. Senate’s revised tax bill, which accelerates the elimination of the $7,500 electric vehicle (EV) tax credit. Musk’s sharp criticism, posted on his social media platform X, highlights the bill’s potential to harm the EV industry, a cornerstone of clean energy innovation. The Senate plans an initial vote on the multi-trillion-dollar package, which Musk warns could devastate jobs and prioritize outdated industries over future-focused ones, according to Bloomberg.

Accelerated End to EV Incentives

The revised tax bill terminates the $7,500 consumer tax credit for new EVs after September 30, 2025, a significant shift from the earlier proposal to phase it out by year-end for most sales. Credits for used and commercial EVs will also cease on the same date. This abrupt cutoff threatens to disrupt EV adoption, as the incentive has been pivotal in making vehicles like Tesla’s Model 3, priced around $40,000, more affordable for middle-class buyers. Musk stated on X that the cuts would be “incredibly destructive” to the U.S., arguing they undermine industries critical to economic and environmental progress.

Industry and Economic Fallout

The tax credit’s elimination could slow EV market growth, which saw 1.1 million U.S. sales in 2024, per the Department of Energy. By reducing affordability, the bill may deter buyers, impacting manufacturers like Tesla, Rivian, and Ford, who rely on incentives to compete with gas-powered vehicles. Small businesses using commercial EVs, such as delivery fleets, face higher upfront costs, potentially stunting electrification efforts. Musk warned the bill would “destroy millions of US jobs,” pointing to the ripple effect on suppliers, dealerships, and charging infrastructure firms. The EV sector employs over 200,000 Americans, with job growth tied to incentive-driven demand.

Regulatory and Competitive Shifts

The bill reflects a broader policy pivot under President Trump, prioritizing traditional energy sectors. This could cede ground to China, where EV sales reached 9.7 million in 2024, bolstered by government subsidies. Without U.S. incentives, domestic manufacturers may struggle to scale, risking innovation lag. The loss of credits also complicates compliance with stricter EPA emissions standards, which assume EV growth to meet 2030 climate goals. Analysts predict a 10-15% drop in EV sales in 2026 if the credit ends, reshaping market dynamics.

Musk’s Rift with Trump Deepens

Musk’s outspoken critique signals a renewed clash with Trump, following his exit from the administration’s Department of Government Efficiency. His claim that the bill offers “handouts to industries of the past while severely damaging industries of the future” underscores a philosophical divide over clean energy’s role. The EV credit’s end could strain Tesla’s growth, as 60% of its U.S. buyers in 2024 utilized the incentive. While Musk’s influence may sway public opinion, the Senate’s vote will determine the bill’s fate, with implications for EV owners and the industry’s trajectory.