A SWEEPING budget legislation will see a $7,500 car tax credit removed – meaning drivers have weeks before the sizable payout ends.
A recent change that’s been passed by Congress will significantly impact electric vehicles buyers and sales across the US.
Congress is set to end EV tax credits, sparking concerns over US competitiveness in the global EV market[/caption]
Sweeping legislation removes $7,500 EV tax credit, saving billions[/caption]
According to Reuters, the well-known $7,500 tax credit for purchasing or leasing new EVs, as well as the $4,000 tax credit for used EVs, will end on September 30.
In the past, these credits have been seen as key incentives for boosting EV sales.
With such a tight deadline, experts predict a short-term spike in EV sales as consumers rush to buy vehicles, followed by a slowdown afterward.
Advocacy groups, such as the Electrification Coalition, have already warned that ending these credits could harm the country’s role in the global EV market and allow countries like China to dominate further.
The bill ends penalties for automakers that fail to meet Corporate Average Fuel Economy (CAFE) standards, while making it easier for them to produce gas-powered vehicles.
The shift may also reduce regulatory pressure to transition to EVs.
But for the government, ending tax credits could save the $169 billion over the next decade – although Harvard University researchers estimate it will reduce EV penetration by 6% by 2030.
Some planned measures, like a $250 annual fee for EVs to fund road repairs and a mandate for the US Postal Service to sell off EV delivery vehicles, were also removed from the final bill.
In general, the new legislation represents a shift in US policy on EVs, with reduced incentives for adoption and softened emissions regulations.
It’s believed this will slow the transition to electric transportation and impact the competitiveness of US automakers in the global EV market.
Dan Levy, auto analyst for Barcalays, said: “We believe the bill reiterates the slowdown ahead for EV penetration in the US, with both the ‘carrot’ and the ‘stick’ softened.”
CALLBACK
This comes as Ford has been forced to pull over 200,000 vehicles off the road due to a dangerous glitch tied to backup cameras, and it’s not the first time.
The problem could cause cameras to go blank or freeze, heightening the risk of collisions and sparking fresh safety fears.
The impacted vehicles were sold across the US, according to federal regulators.
A recall notice from the National Highway Traffic Safety Administration confirms that 200,061 Ford and Lincoln models are affected.
A faulty software update is to blame for the issue, which may leave drivers without a view of what’s behind them.
In an email to The U.S. Sun, Ford confirmed that the issue stems from an error in its SYNC 3 software.
Worse, some cars may keep showing the same frozen image even after switching out of reverse, according to Ford.
Both situations could increase crash risks, particularly in tight or busy spaces.
The automaker warned that a blank or frozen screen could distract the driver or reduce visibility.
Vehicles impacted include models from as far back as 2018 and as recent as 2024, and spans popular names like the F-150 pickup, Mustang, Explorer, Bronco Sport, and Escape.
Why aren’t people buying EVs?
In January, many EV makers reported slow demand. Reuters said there are a few valid reasons for a slow in demand:
- High initial costs. Many automakers, like Tesla, Hyundai, and Ford have conducted “price slashes” on their flagship EVs to attract new buyers, though demand remains slow.
- Higher insurance costs. Some insurance companies cite fire risks, high costs of battery replacement, and higher vehicle weight as reasons for higher premiums.
- Charging anxiety. A large percentage of people remain fearful of being in a situation where they won’t be able to charge if they run out of battery due to a lack of infrastructure.
- Range anxiety. In many instances, EVs still don’t have the range and infrastructure of gas-powered vehicles.
- Poor performance in extreme temperatures. Reduced range in extremely hot or cold weather makes potential buyers wary.
Source: Reuters
