If President-elect Donald Trump makes good on his threat to kill federal tax credits for electric vehicle purchases, it’s likely that fewer buyers will choose EVs. Yet tax credits or not, auto companies show no intention of retreating from a steady transition away from gas-burning cars and trucks, especially given the enormous investment they have already made: Since 2021, the industry has spent at least $160 billion on planning, designing and building electric vehicles, according to the Center for Auto Research. In campaigning for the presidency, Trump condemned the federal tax for EV buyers — up to $7,500 per vehicle — as part of a “green new scam” that would devastate the auto industry. His transition team is reportedly working on plans to abolish the tax credits and to roll back the more stringent fuel-economy rules that were pushed through by the Biden administration. It is far from clear, though, that the Trump administration could actually rescind the credits. Trump’s argument — one that most economists dispute — is that a rapid U.S. shift toward electric vehicles would lead to most EVs being made in China and would swell prices for America’s auto buyers. He has said he would redirect federal revenue recaptured from a canceled tax credit to build roads, bridges and dams. Ending the credits, which were a key provision of President Joe Biden’s Inflation Reduction Act, almost certainly would reduce EV sales, which have been growing in the United States this year, though not nearly as fast as automakers had expected. The slowing growth has forced nearly all auto companies to scale back EV production and delay construction of battery factories that are no longer needed to handle a more gradual transition. Jonathan Chariff, an executive at Midway Ford in Miami, one of the company’s top EV-selling dealers, said he thinks ending the tax credits would severely hurt sales. The credits reduce monthly payments, he noted, making an EV closer in price to a gasoline counterpart. “It becomes more affordable,” he said. “Otherwise, those individuals won’t be able to afford the payments.” Chariff calculated that the $7,500 credit could shrink a buyer’s monthly payment by between $200 and $250, allowing many to afford an EV. On average, electric vehicles sell for about $57,000, compared with around $48,000 for a gasoline vehicle, according to Cox Automotive. (Though they cost more up front, EVs generally are cheaper to operate because maintenance costs are lower, and in most cases electricity is much cheaper than gasoline.) To qualify for the credits, EVs must be built in North America. EVs that contain battery parts or minerals from China or any other nation that is deemed an economic or security threat to the United States qualify for only half the federal credit. Because of that restriction, most of the 75 EV models on sale in the U.S. are not eligible for the full credit. All EVs, though, can receive the full credit toward a lease — a benefit that Trump likely will target. Some plug-in gas-electric hybrids qualify for the credits, too. Asked about the president-elect’s opposition to EV tax credits, Trump’s transition team would say only that he has “a mandate to implement the promises he made on the campaign trail.” Elon Musk, a close adviser to Trump and co-leader of a […]