Trump wants to end EV tax credits as Musk’s Tesla benefits from them

• The Biden-era EV tax credit that President Donald Trump wants to eliminate is benefiting Tesla. The automaker, led by Elon Musk — a special government employee within the Trump administration –– announced that its Cybertruck qualifies for the $7,500 federal incentive.
• While Trump’s transition team had planned to eliminate the credit and his administration issued an executive order against EV subsidies, the federal incentive remains in place since congressional action is required to revoke it.
• As a result, the Cybertruck’s price is reduced to $72,490 from its unsubsidized price of $79,990, and significantly lower than its pre-October 2024 base price of $100,000.

The same Biden-era electric vehicle (EV) policies that President Donald Trump wants to roll back are currently benefiting one of his administration’s most recognizable figures: Tesla CEO and special government employee Elon Musk. This week, Tesla revealed that its Cybertruck now qualifies for the $7,500 federal EV tax credit.

Trump wants the EV tax credit gone, so what’s stopping him?

Before Trump took office, his transition team was reportedly intent on scrapping the $7,500 federal EV tax credit. Upon assuming the presidency, Trump issued an executive order aimed at “the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies.”

However, despite Trump’s efforts, the federal tax credit can only be revoked through congressional action. Therefore, it remains in place for automakers, including Tesla, to bring down the cost of their vehicles.

How much cheaper does it make Tesla’s Cybertruck?

For consumers, this means a reduction in the Cybertruck’s cost. The vehicle now starts at $72,490, compared to its unsubsidized price of $79,990. Additionally, it is a notable reduction from its pre-October 2024 base price of $100,000.

What happens next?

Musk has previously stated that Tesla does not need the federal tax credit to be profitable and has expressed support for its elimination, suggesting that removing the subsidy could ultimately help his company.

Auto industry experts believe the long-term benefits Musk is referring to would come as a result of the challenges that competitors who depend on the credit to grow their businesses would face.