The U.S. House of Representatives approved on Thursday Donald Trump’s bill to eliminate clean energy incentives enacted under the Biden Administration.
Signed into law in August 2022, Biden’s Inflation Reduction Act (IRA) aimed to reduce government spending, lower prescription drug costs, and combat climate change.
Biden introduced tax breaks to stimulate energy-efficient homes and the adoption of electrified vehicles by American consumers.
Consumers were offered up to $7,500 on a new EV and up to $4,000 on an used one. The break was also available when leasing.
The act made the tax breaks available until 2032, however, the incentives will now be eliminated after 2025, according to the bill passed by the Republican majority (215 votes in favor and 214 against).
The proposal initially included a special rule to keep the $7,500 in place for new EVs until the end of 2026 — which was the rule applied before Biden’s term.
The U.S. has offered tax credits for electric vehicle buyers since 2008, when President George W. Bush introduced a $3,400 credit for the first 60,000 vehicles sold by each manufacturer.
In 2009, President Barack Obama expanded the credit to $7,500 and raised the cap to 200,000 vehicles per manufacturer.
After reaching that limit, the credit gradually phased out over six quarters until it ended entirely. As of 2021, Tesla and General Motors are the only reaching that ceiling
The bill now moves to the Senate, where its passage would bring the electric vehicle tax credit to an end on December 31, 2025.
Following the approval of the bill, Trump wrote on Truth Social that “this is arguably the most significant piece of Legislation that will ever be signed in the History of our Country.”
The U.S. President urged the Senate to “get to work, and send this Bill to my desk AS SOON AS POSSIBLE!”
