Budget Bill Seeking To End Federal EV Tax Credit Passes In Senate

Over the past few months, the Trump administration and select members of Congress have sought to roll back or eliminate certain automotive regulations pertaining to things like emissions, fuel economy standards, and electric vehicle mandates. That includes efforts to eliminate the existing federal EV tax credit, as the House of Representatives introduced a bill aimed at nixing the credit back in May, while a slightly different bill hit the Senate just last month. Now, the updated version of the latter budget bill has passed the Senate by a narrow margin.

According to Automotive News, the budget bill passed the Senate with a vote of 51-50, with Vice President JD Vance casting the tie-breaking vote. That bill will now head to the House of Representatives with a goal of passing it quickly so that President Donald Trump can sign it into law before the Independence Day holiday. The bill contains several provisions that stand to impact the automotive industry, with perhaps the most notable being the fact that it would end the federal EV tax credit earlier than previously expected.

As Ford Authority reported yesterday, the newly revised Senate bill aims to end the federal EV tax credit by September 30^th, 2025 – a bit different than an earlier version, which called for the credit to end 180 days after the bill is signed into law for new EVs, and 90 days for used all-electric models. This proposal is also different from the previously-mentioned House bill that would allow the new EV tax credit to continue through the end of 2025, and through 2026 for automakers that haven’t yet sold 200,000 electric vehicles.

In addition to killing off the federal EV tax credit in a couple of months, the Senate bill would also eliminate fines for automakers that don’t meet certain fuel economy standards, and includes a deduction of up to $10,000 in car loan interest over the period of a year for the 2025-2028 tax years, though there are limitations in terms of income, and eligible vehicles must be assembled in the U.S.