US Senate passes ‘Big Beautiful Bill’, ends EV tax credits

Having passed the Senate vote, the bill will now move to the House for a vote, and is expected to be passed and signed into law before 4 July.

The bill would end EV consumer tax credits by 30 September, earlier than originally planned, and would also see fines for non-compliance with Corporate Average Fuel Economy (CAFE) standards – which mandate fuel efficiency targets for OEMs – reduced to nothing.

EV consumer tax credits ending early is something the automotive industry in the US has rallied against, with the National Automobile Dealers Association having previously requested more time to get rid of EV inventory.

While CAFE standards will still be written in law, the new bill (which can only change the fine amount for non-compliance) multiplies the fines by zero – effectively rendering the standards inconsequential. Despite this, OEMs may still be required to continue tracking these standards.

The automotive logistics industry has had a mixed response to the bill, with associations for road logistics and truckers backing the bill, while those more closely associated with EV manufacturing including OEMs and dealerships having less positive reactions.

Henry Hanscom, senior vice-president of legislative affairs at the American Trucking Association, said the bill will “guarantee tax certainty for the nation’s trucking companies”.

He said: “Trucking is the backbone of the economy, employing over 8.5m Americans in companies that range in size from one-truck operators and small family businesses to enterprise carriers. Enacting pro-business, pro-growth tax policies will ensure that all of those companies are able to better plan for the future, invest in their workforce and equipment, and move freight safely and efficiently." 

Meanwhile, the clean energy sector and EV manufacturers have condemned the bill. The American Clean Power Association said it could strand billions in investments.

Tesla CEO Elon Musk had an even stronger reaction, promising to unseat lawmakers who approved the bill, which he called a “disgusting abomination”.

We will update this story as we get more information…