⚠️ Paving the Future or Taxing Competitive Innovation?

The Gist

Senate Republicans are gunning for EV incentives with two new bills: one kills the $7,500 federal tax credit, and the other slaps a $1,000 fee on new EV purchases to make up for lost gas tax revenue.

Their argument? EVs aren’t paying their fair share for road maintenance. But with 39 states already charging EV fees and automakers investing billions, the move could slow adoption and frustrate buyers.

Dealers, expect more customer confusion and shifting demand. Stay sharp, stay adaptable—because Washington’s EV rollercoaster is far from over.

Sources:

• The Verge - Senate Republicans introduce bills to make EVs more expensive

• Reuters - Senators propose killing US EV tax credit, new $1,000 tax for road repairs

• The Hill - Senate Republicans propose bills to kill EV tax credit, add road repairs tax

• AutoWeek - Senate Republicans propose $1000 tax on electric vehicles to fund road repair

What’s the Deal?

If you thought EV incentives were here to stay, think again. Senate Republicans just introduced two bills that could shake up the EV market—and by shake up, we mean make them more expensive. One bill (from Sen. John Barrasso, R-Wyo.) would kill the $7,500 federal EV tax credit, while the other (courtesy of Sen. Deb Fischer, R-Neb.) would slap a one-time $1,000 fee on every new EV purchase to offset lost gas tax revenue.

Translation: Buying an EV? Say goodbye to that tax break and hello to a new fee.

The ELITE Vehicles Act: Not Exactly a Sweetheart Deal

Barrasso’s bill, officially named the Eliminating Lavish Incentives to Electric (ELITE) Vehicles Act, doesn’t just target the $7,500 tax credit—it also eliminates incentives for used EVs ($4,000 credit, gone), investment credits for charging stations, and closes the so-called “leasing loophole.”

Why? Barrasso argues taxpayers shouldn’t be subsidizing what he calls the “luxuries of the nation’s elite.” The bill has 14 co-sponsors, including Senate Majority Leader John Thune (R-S.D.), which means it’s got some real weight behind it.

📢 Quote Check: “Repealing these reckless tax credits from the Biden administration once and for all will stop Washington from giving handouts to our adversaries and high-income individuals.” – Sen. John Barrasso

The Fair SHARE Act: Pay Up for Road Repairs

Sen. Fischer’s Fair Sharing of Highways and Roads for Electric Vehicles (Fair SHARE) Act argues that EVs aren’t contributing to road maintenance because they don’t pay gas taxes. The solution? A one-time $1,000 fee at purchase, which Fischer says equates to what a gas car would pay in federal fuel taxes over 10 years.

📢 Quote Check: “EVs can weigh up to three times as much as gas-powered cars, creating more wear and tear on our roads and bridges.” – Sen. Deb Fischer

But Is This Really “Fair”?

A few inconvenient facts:

• The federal gas tax (18.4 cents per gallon) hasn’t increased since 1993 and isn’t tied to inflation.

• Many EV owners also own gas-powered vehicles, meaning they already pay fuel taxes.

• Automakers have invested billions into EV production, and pulling the plug on incentives could disrupt those investments.

It’s also worth noting that 39 states already have additional EV registration fees—some as high as $250 annually—to cover lost gas tax revenue. So the argument that EVs are getting a free ride isn’t entirely accurate.

What’s Next for Dealers?

🔮 Forecasting Time: If these bills gain traction, expect a slowdown in EV adoption—at least in the short term. Many buyers were already hesitant about EVs due to price and charging concerns, and losing incentives won’t help. For dealers, this could mean:

• Lower demand for EVs: Without the tax credit, sticker shock might drive some buyers back to ICE vehicles.

• More customer confusion: Shoppers will need more education on state-level incentives (some still exist) and total cost of ownership.

• Potential used EV price shifts: If new EV demand slows, used EV prices could stabilize—or even drop.

🚨 Hot Take Alert: Killing the tax credit was always on the table under a Republican administration. But the $1,000 EV fee? That’s a fresh curveball that could change how customers see EV costs long-term.

For now, the industry waits. But if these bills pass, it’s safe to say the road ahead for EVs just got bumpier.

ASOTU’s Final Thoughts

Let’s be real—if you’re reading this, you’re already ahead of the game. Dealers aren’t new to political whiplash, and this latest move on EV incentives is just another chapter in the ongoing saga of Washington vs. The Auto Industry. So, what’s the real takeaway?

• Killing the $7,500 EV tax credit and adding a $1,000 fee might change the way customers shop—but it won’t change the reality that EVs are here to stay.

• The argument that EVs don’t pay their fair share? Well, 39 states already have additional EV fees, so let’s not pretend this is a brand-new revelation.

• Automakers have dumped billions into EV production, so you can bet they’ll have something to say if incentives vanish overnight.

• If these bills pass, expect more hesitation from buyers, more questions from customers, and some possible shifts in used EV pricing.

Bottom line? Keep doing what you do best: stay informed, stay adaptable, and help your customers navigate whatever the industry throws their way. After all, dealers have been through worse—and come out stronger every time.

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