Decoder with Nilay Patel The EV tax credit is dead. What now?
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Oct 16, 2025 Transportation editor Andy Hawkins from The Verge, an expert in electric vehicles, dissects the recent expiration of the federal EV tax credit and its significant impact on the auto industry. He explains how the credit was essential for driving EV adoption and discusses the political reasons behind its elimination. Andy details how automakers like GM and Ford benefited from it, the challenges they face with profitability now, and whether states or companies can fill the incentive gap. The conversation also explores the implications for the EV market and the competitive landscape against China.
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Why The $7,500 Credit Mattered
- The Inflation Reduction Act's $7,500 EV tax credit cut the at-point-of-sale price to push mainstream buyers toward EVs.
- The credit required North American manufacturing and vetted battery supply chains, reshaping industry investment.
Industry Was Built Around The Credit
- Automakers relied on the credit to reach price-sensitive mainstream buyers beyond early adopters.
- Without it, EV sales will drop and companies are already adjusting production and taking big write-downs.
Policy Shift Contradicts Manufacturing Rhetoric
- The Trump administration cut the credit as part of a broader rollback of climate and clean-energy support.
- That move favors oil and gas and contradicts rhetoric about supporting U.S. manufacturing.