The federal budget reconciliation bill — known as the One Big Beautiful Bill Act — recently passed by Congress and signed into law by President Donald Trump rescinds tax credits for EVs purchased after Sept. 30.
“When the new tariffs were announced, there was a rush by consumers to purchase vehicles before they went into effect. We will see the same thing with the EV federal tax credit, consumers considering buying a new EV will be highly incentivized to act before the incentives disappear on Sept. 30,” Matthew Phillips, CEO of Car Pros Automotive Group, a dealership group representing car dealerships in California and Washington state, said via email. “OEMs [original equipment manufacturers], many of whom have significant EV supply on the ground, are likely to ramp up their incentives during this time to further stimulate sales.”
However, how much headwind the lack of a $7,500 tax credit places on the EV momentum is still an open question. Much of it depends on cost, and how closely EVs can reach cost parity with gas-burning vehicles, those in the industry said.
“Affordability is a top issue for many auto buyers, so the EV incentives have definitely helped,” Phillips said.
Left out of the final draft of the recently passed legislation was an annual $250 fee to be paid by EV owners, ostensibly to make up for their use of roadways without paying the gas tax. Tax experts viewed the proposed fee as overly punitive. A number of states, like California, already charge EV owners an annual added registration fee.
“As far as if or when this idea could come back, it would be during the highway funding reauthorization fight,” Alex Muresianu, senior policy analyst with the Tax Foundation, said.
Regulatory changes could also take some of the wind out of EV sales. The new legislation ends penalties for companies violating fuel economy standards, leaving carmakers with little incentive to invest in the development of EVs or gas-burning cars that operate more efficiently.
California, which has led the nation in adopting new regulations aimed at phasing out fossil fuel vehicles — both in the light-duty sector and in heavy-duty trucking — has paused its rollout of the Advanced Clean Fleets rule and the Advanced Clean Trucking regulations, following actions by Congress, and signed by Trump, to prevent the state from setting its own air protection standards and rules. These actions have been met with a legal challenge from California Attorney General Rob Bonta, joined by the attorneys general of 10 other states.
Federal shifts would also end the Golden State’s regulation requiring that all new cars sold in the state be zero-emission by 2035. By the end of the first quarter this year, 23 percent of new-car sales were zero-emission in California, according to Veloz, an EV industry advocacy group based in Sacramento. This is down from about 25 percent at the end of 2024.
“Removing both the tax incentive ‘carrot’ and the CARB [California Air Resources Board] mandate ‘stick’ are going to drastically slow the adoption of full EVs in the U.S.,” Phillips said. “However, don’t count the EV out yet. With a smooth ride, quick acceleration and a lower cost to operate, many people are likely to stick with EVs, and PHEV [plug-in hybrid electric vehicle] sales will continue to grow.”
That optimism toward the future of electrified transportation can be seen in various projects completed or moving forward. Veloz recently launched a new ad and reduction campaign, funded in part with $43.5 million from Electrify America, the nationwide high-speed charging network.
And even though the 2025 Electric Vehicle Outlook by Bloomberg indicates “EV adoption outlook [in the United States] is now much lower as EV policies and support are being rolled back,” the report notes global EV sales will continue to grow and represent 25 percent of new car sales this year.
WattEV, which builds and operates high-speed charging depots for the trucking industry, broke ground last month on its sixth heavy-duty electric truck charging depot in California, located at the Port of Oakland. The facility will be capable of charging 25 heavy- or medium-duty trucks with up to 240 kilowatts per plug. The facility also offers megawatt charging, which includes massive charge cables able to power up freight trucks in about 30 minutes — comparable to refueling a diesel truck.
The project received state grant funding and is expected to be complete in early 2026.
“WattEV welcomes government support for its goal of electrifying transportation, but our business model rests on evidence that electric trucks can move freight as cost‑effectively, if not better, as diesel ones, while delivering substantial environmental benefits,” said CEO Salim Youssefzadeh in an email.
The company has three other heavy-duty charging depots under development across southern California. The Otay Mesa depot near San Diego, with seven megawatt chargers, will be located just 1,000 feet from the Mexico border, to supply the cross-border freight activity. Another depot planned in Baker, Calif., on the Interstate 15 corridor, will serve the freight traffic moving between southern California and Las Vegas. And the company is building out 12 megawatt chargers at the Port of Long Beach. All three sites are intended to reduce charging time to 30 minutes or less.
