Senate Proposal to Budget Bill Would End EV Tax Credit on September 30
The U.S. Senate is deliberating hundreds of provisions to a tax and domestic policy bill, including changes that would accelerate the demise of EV tax credits.
The United States Senate is looking to accelerate the expiration of federal EV tax credits with a new provision in the Republican tax and domestic policy bill.
A previous Senate bill would have ended the credit 180 days after the bill’s passing, with a House version eliminating the bill at the end of the year.
If the Senate passes its most recent proposal, federal EV tax credits will expire on September 30, 2025.
UPDATE 7/3/25: The House of Representatives has officially passed The One Big Beautiful Bill, which will now be sent to the president’s desk to be signed into law. Along with ending the federal EV tax credit, the bill contained a new tax deduction vehicle that will allow taxpayers to deduct interest on new car loans. That story can be found here.
Senate Republicans are hoping to expedite the expiration of federal EV tax credits with a new provision that would sunset the program on September 30, 2025. The provision is part of the major tax and policy bill being pushed through the United States Senate right now.
A House version of the bill would have eliminated the credit at the end of 2025, while a previous version of the Senate bill would have terminated the $7500 credit 180 days after the bill’s passage. The original wording of the Inflation Reduction Act would have terminated the credit at the end of 2032.
The accelerated timeline is in direct contrast to automakers and dealers, with the National Automobile Dealers Association telling Automotive News that it urged Congress to give retailers more time before removing incentives. “Dealers are still carrying a high EV inventory with approximately 140,000 EVs currently on dealer lots. If EV tax credits are going to be repealed, NADA urges Congress to include a reasonable transition period,” the group said.
