America’s traditional automakers are asking President-elect Donald Trump to preserve federal electric vehicle tax credits, putting them on a collision course with Tesla CEO Elon Musk, their chief EV competitor.
In a letter last week to Trump, the Alliance for Automotive Innovation (AAI), the trade group for major automakers including General Motors, Ford, Toyota and Volkswagen, asked “to preserve auto-related provisions in the current tax code.” That includes a $7,500 credit from the 2022 Inflation Reduction act for purchases of new EVs.
Prior to the letter, it was unclear how forcefully the auto industry would advocate for the tax incentives under Trump, who has been critical of IRA funding. Trump’s transition team is reportedly weighing strategies to eliminate the credit.
The tax incentives are the biggest carrot that the Biden administration offered the auto industry when it backed the IRA, which had numerous provisions to reposition the U.S. as an EV-making powerhouse to rival China. Overall, the IRA offered incentives to both EV buyers and battery-makers that were designed to encourage investment in factories in the U.S. or allied nations.
