The House-passed “One Big, Beautiful Bill Act” on May 22, 2025, eliminates electric vehicle tax credits, including the $7,500 consumer credit, drawing sharp criticism from environmental groups and manufacturers. The bill, now in Senate debate, rolls back Biden-era clean energy incentives under the Inflation Reduction Act, phasing out credits for projects not under construction within 60 days of passage. This move aligns with President-elect Trump’s fossil fuel priorities but threatens EV adoption, per the CBO.
The electric vehicle tax credits phase-out could impact key states like Michigan and California, where EV sales are strong. Manufacturers like Tesla and General Motors warn of job losses and reduced innovation. The bill also introduces a tax deduction for American-made cars, capped at $10,000, to boost domestic manufacturing, but critics argue it won’t offset the loss of EV incentives. The 2017 Tax Cuts and Jobs Act extension and small business deduction increase to 23% are overshadowed by environmental concerns.
Other provisions include no taxes on tips or taxes on overtime pay, and a $4,000 tax deduction for seniors, all expiring in 2028. The remittance tax on non-citizens, including Non-Resident Indians, adds complexity, with the IRS struggling due to staff reductions. Senate debate will likely address the balance between economic growth and environmental goals, with amendments possible to soften the EV credit cuts.
