The consequences of a collapsed friendship: The US will stop subsidizing electric vehicles in the fall

A tax deduction of $7,500 for the purchase or rental of new electric vehicles in The United States expires on September 30, according to new tax and budget legislation passed by Congress, as reported by Reuters.

At the same time, the $4,000 support for used electric vehicles will cease — an incentive that has contributed significantly to the growth of electric vehicle sales in recent years.

The human rights organization Electrification Coalition reacted very sharply to the decision of the White House, stating that "as electric vehicles are gaining an increasing share of the global car market, it is becoming clear that the future of transportation is for electricity; this bill cedes America's role in this future to China."

The US initially introduced this tax credit in 2008, limited to 200,000 units per manufacturer. The 2022 reform extended the loan to leasing cars and lifted the manufacturer's restriction.

The new law also offers notable advantages to traditional automakers, including the abolition of fines for non-compliance with environmental regulations, which facilitates the production of vehicles with internal combustion engines. According to the well-known analyst Dan Levy, the abolition of tax incentives by the end of September will lead to a temporary increase in sales of electric vehicles, as customers will rush with planned purchases. However, after this period, a sharp drop in sales is expected.

"We believe that this law confirms the slowdown in the penetration of electric vehicles in the United States, as both incentives ("carrot") and strict regulations ("stick") weaken," Levy explained.