U.S. House Speaker Mike Johnson said on Thursday that the $7,500 federal electric vehicle (EV) tax credit is “more likely than not” to be eliminated as part of ongoing budget negotiations, signaling a potential rollback of a key clean energy policy.
Speaking to reporters on Capitol Hill, Johnson said, “I think there is a better chance we kill it than save it. But we’ll see how it comes out,” referencing the incentive that has helped drive EV adoption in the United States. His comments come as Congress returns from its April recess to resume contentious negotiations over the federal budget.
The Republican-controlled House, Senate, and White House are weighing deep spending cuts to offset new tax reductions backed by the Trump administration. Analysts say these proposed tax changes, coupled with recently introduced tariffs, will likely increase the federal deficit, with some estimates projecting a $4.5 trillion shortfall over the next decade.
The EV tax credit has been a longstanding target for fiscal conservatives. In 2024, the federal government allocated an estimated $2 billion toward advance, point-of-sale EV credit payments under the Inflation Reduction Act.
While Trump’s initial plan sought to slash federal spending by $2 trillion, that goal has been scaled back to $150 billion by 2026. With the EV tax credit now in jeopardy, the future of federal support for electric vehicle buyers remains uncertain.
Source: Bloomberg
