The recent passage of Trump’s ‘Big Beautiful Bill’ by the Republicans in Congress is set to have significant implications for the electric vehicle (EV) and renewable energy industries in the United States. One of the key players in these markets, Tesla, is expected to be impacted in several ways.
First and foremost, the bill eliminates the $7,500 EV tax credit in the US. This means that by the end of 2025, automakers who have delivered more than 200,000 electric vehicles in the US will no longer have access to this tax credit. While this may lead to a temporary boost in demand for Tesla as buyers rush to take advantage of the credit before it expires, it is likely to result in a drop in demand starting in 2026. Additionally, some of Tesla’s competitors may still have access to the tax credit in 2026, putting Tesla at a disadvantage.
In addition to the removal of the EV tax credit, the bill also introduces a $250 annual fee for electric vehicles and a $100 fee for hybrids. This fee is intended to fund road repairs traditionally supported by gas taxes. This increase in the annual cost of ownership for EV owners, including Tesla owners, could potentially deter buyers from choosing electric vehicles, especially considering Tesla CEO Elon Musk’s support for the GOP, which pushed for this legislation.
Furthermore, the budget bill terminates credits for most clean energy initiatives, including the Investment Tax Credit (ITC) for solar and energy storage systems. Effective January 1, 2026, the ITC, which previously provided a 30% credit for qualifying solar and battery storage installations, will be eliminated. This could result in a significant drop in demand for solar and energy storage systems in 2026, negatively impacting Tesla’s business as a leader in energy storage in the US.
Overall, these changes are expected to have a detrimental impact on Tesla’s business in the mid to long term. While the bill may temporarily boost demand for Tesla in 2025, the removal of key incentives and credits could pose challenges for the company in the future. It remains to be seen how Tesla and the broader EV market in the US will navigate these changes and adapt to the new regulatory landscape.
