As we’ve previously explained, cutting the EV tax credits now would be a costly mistake. If the EV tax credits are rolled back:
- People will lose hundreds of thousands of jobs, and companies will lose billions of dollars in investments. Since January, uncertainty about federal support for clean energy projects has cost $15.5 billion in investments and nearly 12,000 lost jobs.
- American auto manufacturers will fall behind as the rest of the world transitions to electric. The future of the auto industry is up for grabs, and the future of the auto industry is electric.
- Innovation will stall, and with it the burgeoning industries and companies in EV-adjacent spaces like battery recycling. The tax credits help build domestic supply chains and energy security.
- U.S. drivers will be shackled to expensive oil and gas, which also leads to more pollution and health problems.
Businesses and consumers need certainty to move forward. The EV tax credits work and are carefully designed to ensure responsible consumer use and support manufacturing and supply chain development.
Because cutting the tax credits would harm consumers and businesses, major auto retailers like Carmax and Carvana, individual dealers, and other automotive stakeholders have signed open letters to Congress, calling for them to keep the suite of EV tax credits.
This letter was sent to the House of Representatives on July 2, 2025. Other car dealerships and automotive principals may sign the open letter here.
Dear Members of Congress,
We are auto dealerships and supporters from across the country who share a deep commitment to the customers and communities that we serve. We urge you to reject the provisions in the budget reconciliation process that would increase costs for Americans who want to drive electric vehicles.
For years, dealerships like ours have invested billions of dollars as small businesses to serve our communities, to improve EV education, and offer exceptional service.
We need a stable and consistent market for our dealerships to plan, invest, and grow. Recent attempts to abruptly roll back key EV-related Inflation Reduction Act tax credits pose a serious threat to our business continuity and the industry’s long-term investments based on previous market signals and American leadership. Collectively, changes on such a rapid timeline would introduce significant uncertainty and deter investment.
We urge Congress to consider moderation on the pace of overhauling the critical tax credits that our customers are counting on for new and used electric vehicles and to deploy electric vehicle chargers.
Used EV rebates in particular have provided a valuable bridge for working- and middle-class Americans. For car dealerships, these time-of-sale rebates have enabled us to better serve our customers and expand our businesses. Many of us have built substantial used EV businesses in markets with a lower cost of living, selling to customers who can then reduce their monthly household costs. For many of our working-class customers, the used EV rebate becomes the down payment that enables a vehicle purchase at all.
The following incentives are valuable for our businesses and must continue, even in a reduced form, for at least the next several years:
- 25E – Credit for Previously-Owned Clean Vehicles;
- 30C – Alternative Fuel Vehicle Refueling Property Credit;
- 30D – Clean Vehicle Credit;
- 45W – Credit for Qualified Commercial Clean Vehicles;
- 45X – Advanced Manufacturing Production Tax Credit.
A gradual sunset of the EV-related rebates, rather than an abrupt repeal, is essential to serve the interests of American consumers as well as car dealerships and the broader auto industry. A slow phase-out would ensure market stability. Sudden elimination will disrupt the used car market, a backbone of the American economy. A multi-year transitional period would also provide the opportunity for Americans to continue adopting cleaner vehicles more affordably. Finally, many independent and family-owned dealerships are depending on the current incentive structure to remain competitive. An immediate repeal could disproportionately affect these businesses, reducing jobs and opportunities in communities nationwide.
A report from the International Council on Clean Transportation forecasts that repealing provisions from the Inflation Reduction Act would risk 130,000 jobs associated with auto manufacturing, plus an additional 310,000 indirectly related jobs, by 2030 in the U.S.
Omitting the EV Registration Penalty is Right
The House initially proposed an annual $250 EV and $100 hybrid registration fee from the Transportation and Infrastructure Committee. These fees would be excessively punitive and unfair to drivers. While Americans’ use of the transportation system varies, the average fuel consumption per light-duty vehicle in 2023 was 447 gallons. At the current federal gas tax rate of 18.4 cents per gallon, the average light-duty vehicle would have paid only $82.25 in federal taxes to federal trust funds that year. Combined with state EV fees, which are similarly high compared to state gas tax revenues per user, EV drivers would be paying disproportionately and discouragingly high taxes under such a proposal.
We’re thankful that the Senate Finance committee chose to omit this penalty fee for the millions of Americans that already pay steep state EV-specific state registration fees.
We were very concerned that using the budget reconciliation process to impose new fees on drivers would circumvent substantial discussions that are needed to address the Highway Trust Fund’s historic challenges. To reach fiscal sustainability, Congress should examine how all drivers, including EV drivers, contribute to the transportation system’s upkeep and efficiency. That conversation must occur during a robust bipartisan surface transportation reauthorization process.
The undersigned respectfully urge Congress to avoid business-killing abrupt changes to EV credits and to ensure that EV and hybrid penalty fees remain out of any reconciliation package.
Sincerely,
Carmax, Nationwide
Carvana, Nationwide
HorsePower Motors, California
San Diego Auto Finders, California
I.g. Burton Auto Group, Delaware
Winner Subaru & Volkswagen, Delaware
Carman Ford/Lincoln, Delaware
Carman Chrysler Jeep Dodge, Delaware
First State Chevrolet, Delaware
Green Wave Electric Vehicles, New Hampshire
RS Motorsports, North Carolina
iDrive1 Motorcars, Texas
Slipstream, Texas
EV Auto, Utah
PrivateAuto, Utah
KeySavvy, Minnesota
Eastern Sierra Electric Vehicle Association, California
EV Life, Inc, California
Plug In America, California
Fox Valley Electric Auto Association, Illinois
Nevada Electric Vehicle Association, Nevada
Blue Ridge Chapter of Electric Vehicle Association, North Carolina
Oregon Electric Vehicle Association, Oregon
Houston Electric Vehicle Association, Texas
Drive Electric Richmond Vehicle Association, Virginia
Campbell Volkswagen of Edmonds, Washington
Mid-Columbia Electric Vehicle Association, Washington
West Virginia Electric Auto Association, West Virginia
Wisconsin Electric Vehicle Association, Wisconsin
