Republicans Target EV Perks With New Bill: Ford, Tesla, Rivian Face Fallout As $200 Billion In Battery Belt Investments Hang In Balance

House Republicans on Monday introduced legislation to eliminate the electric vehicle tax credit and repeal fuel efficiency rules, potentially disrupting billions in automaker investments amid growing industry concerns about abrupt policy changes.

What Happened: The proposal, scheduled for a House Ways and Means Committee hearing on Tuesday, would terminate the $7,500 new-vehicle tax credit and $4,000 used-vehicle credit on December 31, though it extends the new-vehicle credit one year for automakers that haven’t reached 200,000 EV sales, Reuters reported.

While preserving the crucial battery production tax credit, the bill adds a provision barring credits for vehicles using components from Chinese companies or made under Chinese licensing agreements starting in 2027. This could impact automakers like Ford Motor Co. F and Tesla Inc. TSLA that utilize Chinese battery technology, the report noted.

The legislation would also rescind any unobligated funding from an advanced technology vehicle loan program that recently finalized several major deals, including $9.63 billion to Ford-SK On joint venture, $7.54 billion to Stellantis N.V. STLA-Samsung SDI venture, and $6.57 billion to Rivian Automotive Inc. RIVN.

Why It Matters: Electric Drive Transportation Association President Genevieve Cullen criticized the proposal as “catastrophically short-sighted,” arguing it would deliver “an enormous market advantage” to competitors like China while threatening U.S. manufacturing jobs.

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The move aligns with comments from House Speaker Mike Johnson, who recently stated, “I think there is a better chance we kill it than save it,” regarding the EV credit program. Industry experts project the incentives could cost $200 billion over the next decade.

Major U.S. automakers, including General Motors Co. GM and Ford, have urged the President Donald Trump administration to phase out credits gradually rather than eliminate them immediately, warning that jobs in the growing “Battery Belt” across 12 states could be at risk.

The U.S. has already committed approximately $200 billion to create 200,000 EV-related jobs.

Photo Courtesy: Natee Meepian On Shutterstock.com

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