US May Cancel Tax Credit Policy for EVs

According to foreign media reports, despite supporters' claims that incentives for environmentally friendly cars can create jobs and reduce emissions in the US, the US Congress is still likely to eliminate the EV tax credit policy in the near future.

In an interview, Mike Johnson, the Speaker of the US House of Representatives, said, "I think there is a good chance we will eliminate this policy. But we will have to wait and see the final outcome."

Prior to this, similar situations have also emerged in markets such as Germany and China, where both countries have been gradually narrowing policy subsidies over the past few years. However, part of the reason for the US to cut tax credits is to fund Donald Trump's massive tax cut plan.

Meanwhile, the affordable EV market is also facing another challenge: tariffs. Companies such as Ford, General Motors, and Stellantis often outsource the production of low-margin car models to improve profit margins. This has resulted in models like the Jeep Wagoneer S, Chevrolet Blazer EV, Chevrolet Equinox EV, and Ford Mustang Mach-E being manufactured in Mexico. With the US imposing a 25% tariff on all imported cars and offering no tax relief, the import costs of these models will rise significantly.

However, regulators require automakers to sell a certain number of EVs, which means that in the short term, automakers will continue to sell EVs manufactured in Mexico. Now, automakers can only maintain sales at higher losses.

Of course, there is still some room for maneuver. Perhaps representatives from states with EV factories will raise objections. Maybe the bill will be vetoed in the Senate, where Republicans hold a slim majority. However, foreign media speculate that if the bill is ultimately submitted to Trump, the US president will certainly not veto it. Trump has previously made it clear that he opposes EV subsidy policies and does not want to foot the bill.

If the incentives are indeed eliminated, it is expected that the US EV market will experience significant disruption. If consumers have plans to purchase an EV, they should complete the purchase before the tax credit is eliminated.