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Michael Buschbacher, partner at Boyden Gray PLLC, discusses concerns about an electric vehicle mandate on The Bottom Line.
President-elect Trump is expected to undo many of the green initiatives pushed by President Biden when he returns to the White House, including rules aimed at incentivizing the production and purchase of electric vehicles (EVs).
As for purchases, Trump’s transition team is reportedly already looking to get rid of the $7,500 tax credit for the purchase or lease of certain models of electric and plug-in hybrid vehicles that was passed as part of the Fuel Reduction Act. Inflation 2022, Biden signature.
President Biden drives the electric Ford F-150 Lightning at the Ford Dearborn Development Center in Dearborn, Michigan, on May 18, 2021. (Nicolas Kamm/Getty Images)
Abandoning the federal subsidy is seen as having the greatest potential impact on consumers who want to buy an electric vehicle or who might consider buying one.
“The EV tax credit was intended to make electric vehicles more affordable for the average consumer, and they have done just that,” said Scott Kunes, chief operating officer of Kunes Auto & RV Group. “We have seen a significant increase in sales and leases of electric vehicles as a direct result of federal tax incentives. Repealing them would once again put those vehicles out of reach of the average consumer.”
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Shawn McLaughlin, CEO of Emporia Energy, told FOX Business that industry research shows that most current electric vehicle owners were motivated to make the switch because it was their way of doing their part to help the environment.
A driver plugs in a Tesla electric vehicle for charging at a Tesla Supercharger location in Santa Monica, California, on May 15, 2024. (Photo by PATRICK T. FALLON/AFP via Getty Images/Getty Images)
He argues that to continue growing EV adoption, the auto industry needs to attract new buyers who are more price-sensitive.
“A reduction in government support and incentives for Electric Vehicle Adoption will slow EV sales growth over the next two years by making the current EV offering less price-competitive,” McLaughlin said.
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Still, even if the tax credit is eliminated, the market will adjust to meet the needs of EV customers.
“With improvements in battery technology and manufacturing, the unsubsidized cost of electric vehicles will reach cost parity of ICE vehicles in 2026-2027, which will begin to attract the most cost-sensitive buyers, regardless of the federal electric vehicle tax credit,” McLaughlin added.
Automotive expert Mike Caudill reacts to California’s controversial initiative to use electric cars as police vehicles during an appearance on ‘The Big Money Show.’
Kreg Peeler, founder and CEO of EVject, a standalone charging connector for electric vehicles, agrees, but predicts a massive shift is coming to the auto industry that will make the discussion over EV tax credits moot.
“Over the next 10 years, it won’t matter what consumers think of electric vehicles,” Peeler told FOX Business. “It’s the AVs (autonomous vehicles) that win.”
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“As full autonomy spreads, car buyers will no longer be drivers. Fleets will become commonplace,” he predicts. “Most travelers will pay for their trips by the mile or minute and will not purchase their own vehicle.”
