A recent House-passed tax bill could reshape the electric vehicle (EV) landscape in the U.S., eliminating key subsidies that have fueled adoption and manufacturing. Reported by The New York Times, the legislation, if enacted, would raise EV prices, slow sales, and hinder America’s competitiveness in clean energy, while imposing new fees on owners.

Subsidy Cuts and Price Hikes

The bill repeals a $7,500 tax credit for EV purchases, set to expire by year-end for most models, effectively increasing costs for buyers. EVs already carry a premium over gas-powered cars, often thousands more. The legislation also introduces a $250 annual fee on EV owners, more than double the average $100–$120 in yearly fuel taxes paid by owners of conventional vehicles. “We will not realize the energy efficiency and health benefits as fast as we could,” said Eleftheria Kontou, assistant professor at the University of Illinois, highlighting the environmental toll of slower EV adoption.

Combined with President Trump’s proposed 25% tariffs on imported cars and parts, these changes could make EVs significantly less affordable. Analysts predict an immediate price surge, potentially delaying automaker plans for new factories.

Industry and Job Losses

The rollback targets incentives from the 2022 Inflation Reduction Act, designed to bolster U.S. battery production and compete with China’s dominance in EV supply chains. Without these, the U.S. risks losing ground. “It’s a big win for China and bad for American manufacturing,” said Mike Murphy, CEO of the EV Politics Project. Research from the International Council on Clean Transportation estimates 130,000 jobs could vanish by 2030, with Michigan, Texas, and Tennessee hit hardest.

The bill also phases out credits for battery factories using Chinese technology within two years, threatening projects like Ford’s Michigan plant, which leverages expertise from CATL, a leading Chinese battery maker. “The production tax credit spurred American investments and jobs, which could now be at risk,” Ford stated.

Global Competitiveness and Technology

The U.S. lags behind China and Europe in EV sales, with only 600,000 units sold in North America from January to April 2025, a 5% increase, compared to China’s 3.3 million (35% growth) and Europe’s 1.2 million (25% growth). Cutting subsidies could widen this gap, even as battery technology advances. Solid-state batteries, like those tested by BMW and Mercedes-Benz, promise over 600 miles (965 km) of range and faster charging, but higher costs without incentives may slow their rollout.

EV Market Resilience

Despite the challenges, analysts remain cautiously optimistic. “In the long term, we’ll get there,” said Jessica Caldwell, head of insights at Edmunds.com, noting that falling battery prices and improving technology will drive EV affordability. By 2030, EVs with over 300 miles (482 km) of range could match or undercut gas-powered cars in price, per the International Council on Clean Transportation. However, without subsidies, sales may drop from a projected 40% of new car sales in 2030 to just 24%, according to Princeton’s Jesse Jenkins.

Senate Uncertainty

The bill faces an uncertain fate in the Senate, where some Republicans hesitate to fully repeal the Inflation Reduction Act, especially in states benefiting from EV investments. Political pressures and Trump’s agenda could still push it forward, but resistance from representatives in factory-heavy districts may lead to revisions.

This legislation signals a pivotal moment for EVs in the U.S., balancing short-term costs against long-term innovation and environmental goals. For EV owners and enthusiasts, the coming months will be critical in determining the industry’s trajectory.