The EV tax credit is gone — now the hard part begins

Hello, and welcome to Decoder! This is Jake Kastrenakes, executive editor at The Verge. I’m filling in for Nilay for one Thursday episode while he’s settling back into full-time podcast hosting duties. 

We’ve got a very good episode for you today. My guest is Verge transportation editor Andy Hawkins, and we’re talking about the federal EV tax credit. The tax credit expired at the end of September, and there are a lot of questions about what happens to the auto industry after its demise. 

In its latest form, the tax credit offered a $7,500 discount on eligible, domestic-made electric cars. As you’ll hear Andy explain, this was designed to accomplish a lot of different things all at once: prop up the United States’ EV market, fight climate change, and keep pace with China, which has become the global leader in affordable EVs. 

But the second Trump administration has not been kind to the renewable energy movement, and EVs have become a bit of a political football over the last several years. Trump has turned them into a symbol for government overreach and wielded them as weapons to target his enemies. Just a few weeks ago, at the United Nations General Assembly, Trump called climate change a “con job.” So, that’s how he feels about that. 

Now the EV tax credit has expired, and it’s not coming back anytime soon. So where does that leave the auto industry? And what happens to the traditional American carmakers that have been investing heavily in domestic production to electrify their lineups? 

As you’ll hear Andy lay out, there’s a tough road ahead. EVs are expensive to make and expensive to buy. The supply chain they rely on is intertwined with China, and now subject to tariffs and an escalating trade war. And consumers are highly price sensitive when it comes to EVs and new technology that comes with them, much more so than the early adopters who flocked to Tesla years ago.

If the US auto industry wants to win back buyers, it’s going to need to produce cheaper EVs, much like China does. And that’s going to require manufacturing, supply chain, and technology innovations that will take some time to materialize. 

This is a really hard, complicated set of problems, with a lot of moving parts, so I was really excited to have Andy on the show to break down all of these components and give us a clearer picture about what’s coming next.

If you’d like to read more on what we talked about in this episode, check out the links below:

• The EV tax credit is dead — here’s what happens next | ⁠The Verge⁠
• GM takes a $1.6 billion hit on EVs | ⁠The Verge⁠
• Ford CEO Jim Farley on China, tariffs, and affordable EV | ⁠The Verge⁠
• Ford lost $5 billion on EVs in 2024, teases new models | ⁠⁠The Verge⁠
• EV makers fill tax-credit void with costly discounts | ⁠Automotive News⁠
• So much for Ford and GM’s scheme to extend the EV tax credit | ⁠The Verge⁠
• Stellantis replaces EV tax credit with its own discount | ⁠Automotive News⁠
• Tesla sales picking up thanks to expiring tax credit | ⁠The Verge⁠
• California Reverses Pledge To Revive EV Tax Credit | ⁠SF Chronicle⁠
• Global EV sales growth slows to 15% in August, research firm says | ⁠Reuters

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