By John Higham, EVA Board Member

Within hours of taking the Oath of Office, President Trump signed an executive order titled Unleashing American Energy. One of the things it tries to do is to eliminate the “electric vehicle (EV) mandate” even though there is no mandate.

The Electric Vehicle Association has received many requests for clarity about what this means and specifically, if what is known as the $7,500 EV tax credit has been revoked.

In short, Trump’s Unleashing American Energy executive order is mostly a political ploy to draw the line in the sand, but little else, at least as far as tax credits go.  

The IRS code that gives consumers a $7,500 credit when they purchase an EV is Section 30D. It was passed by Congress as part of the Inflation Reduction Act of 2022 and cannot be revoked by executive order. As of this writing on February 7, 2025, Congress has not made any changes to Section 30D. So for the time being, the tax credit remains intact. 

As Section 30D pertains to the tax year, it is possible that Congress could still pass a law that would apply to vehicles purchased at any time during the tax year. It is possible that someone could purchase a new EV in February and qualify for the credit and Congress could change the qualifying criteria in March and the buyer would be liable to repay the credit. EVA does not give financial advice, and while we believe this is an unlikely scenario, we recommend consulting with your tax advisor or accountant.

If you want to purchase a qualifying EV and apply the $7,500 credit, keep your fingers crossed that Congress does not try to claw the credit back. Once you submit your taxes by April 15, 2026, you can uncross your fingers.

That’s for EV that are purchased. EVs that are leased are an entirely different story.

The tax credit for leases is done under Section 40W and applies to businesses. The Biden Administration allowed for a favorable interpretation of Section 40W so that it could apply to companies that finance EV leases. When you lease a car, the legal owner is the lease company, not the person who makes the payments and drives it everyday. Under the current interpretation of Section 40W, the lease company receives the $7,500 tax credit, and in most cases, they pass it on to the consumer. While that would also require Congress to change Section 40W, that liberal interpretation used by the Biden administration can be changed by the stroke of a pen.

The nice part is that, once you sign a lease agreement with a financial institution, the institution assumes the risk of the tax code being changed.

Bottom line – if your lease company is offering a $7,500 incentive to get you in an EV, take it while you still can.