In an escalation of Republican opposition to electric vehicle (EV) prone policies, two new Senate bills seek to eliminate key incentives that have fueled EV adoption in the U.S. If passed, the legislation would not only raise the price of electric cars for American consumers but also stifle the growth of automakers like Tesla, whose largest market remains the United States.
The proposed laws—one sponsored by Sen. John Barrasso (R-Wyo.) and another by Sen. Deb Fischer (R-Neb.)—align with the broader efforts of President Donald Trump and his allies to roll back the Biden administration’s clean energy initiatives. While Tesla CEO Elon Musk has frequently positioned himself as a right-wing ally, his vocal support for conservative causes has not deterred the Republican Party from aggressively pursuing policies that could severely damage Tesla’s growth and hinder the transition to electric mobility in the U.S.
A Legislative Assault on EVs: What’s in the Bills?
The first bill, Barrasso’s Eliminating Lavish Incentives to Electric (ELITE) Vehicles Act (S. 541), proposes the most sweeping changes, aiming to eliminate all federal tax credits for EV purchases, used EVs, and EV charging infrastructure. The second bill, sponsored by Fischer, seeks to impose a $1,000 tax on the purchase of every new electric vehicle.
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Barrasso’s bill would eliminate the $7,500 federal EV tax credit, a crucial driver of adoption that has helped offset the higher upfront cost of electric vehicles. Without this credit, EVs would immediately become more expensive, making them less competitive with gasoline-powered cars. The bill also seeks to abolish the $4,000 used EV tax credit, which has played an essential role in making electric cars more accessible to lower-income buyers. Without this incentive, the used EV market could shrink, making affordable electric cars harder to find.
Another major target is the federal investment tax credit for EV charging stations, which has helped expand the U.S. charging network. If the bill is passed, funding for new charging infrastructure would dry up, slowing the growth of charging stations and reinforcing concerns over range anxiety—one of the biggest barriers to mass EV adoption. Additionally, loophole incentives for leased EVs, which have allowed many consumers to take advantage of EV subsidies, would be closed under the proposed legislation.
Fischer’s bill goes a step further by actively penalizing EV buyers with a $1,000 tax on every new EV purchase. This move is designed to discourage consumers from choosing electric vehicles altogether, tilting the playing field back in favor of gasoline-powered cars.
How the Legislation Threatens Tesla and the U.S. EV Market
The U.S. is Tesla’s most important market, accounting for a significant share of its sales. By raising the cost of EVs and disincentivizing purchases, these bills could slow Tesla’s growth and hurt the broader EV industry in several ways.
Without federal incentives, consumer demand for EVs could drop, particularly for Tesla’s vehicles, which are priced at a premium. Tesla has relied on tax credits to make its cars more affordable for middle-class buyers, and the removal of these incentives would make its models less attractive compared to gasoline-powered alternatives.
The expansion of Tesla’s Supercharger network, which has been crucial in making EV ownership viable, could also slow down if incentives for charging infrastructure are removed. Tesla’s ability to invest in and expand its charging network has been bolstered by federal tax credits, and without these incentives, the company may struggle to continue its rapid growth in charging coverage.
Tesla’s dominant position in the U.S. EV market is also under pressure from increasing competition. Legacy automakers such as Ford, General Motors, and Hyundai have been ramping up their EV production, with some of their models qualifying for federal tax credits. If Tesla loses access to these incentives while competitors continue to benefit from them, the company could face a growing competitive disadvantage.
Investor confidence in Tesla is another factor at risk. Tesla’s stock is highly sensitive to policy changes that affect EV adoption, and any sign that government support for EVs is weakening could lead to increased market volatility. If these bills gain traction, Tesla’s share price could take a hit as investors reassess the company’s long-term growth prospects.
Elon Musk’s Right-Wing Leanings Offer No Protection from Republican Anti-Green Policies
Despite his outspoken support for right-wing political figures and policies, Musk has found himself at odds with Republican lawmakers who remain hostile to EVs and green energy initiatives.
Over the past few years, Musk has positioned himself as an ally of conservative causes, repeatedly attacking the Biden administration, opposing labor unions, criticizing environmental regulations, and promoting Republican narratives about government overreach. He has also courted Trump supporters and frequently uses his social media platform, X (formerly Twitter), to amplify right-wing talking points.
Yet, this has not shielded him or Tesla from the Republican Party’s aggressive efforts to dismantle EV-friendly policies. Trump and his allies remain closely aligned with the fossil fuel industry, which sees the rise of electric vehicles as a direct threat to its dominance. While Musk may be a favored figure among conservatives for his opposition to the Democratic Party, that favoritism does not translate into Republican support for Tesla’s long-term business interests.
Trump, in particular, has taken an explicitly anti-EV stance, falsely claiming that the Biden administration was “forcing” Americans to buy electric cars and vowing to reverse all EV incentives if re-elected. His rhetoric appeals to industries that have traditionally backed the Republican Party, including oil companies and auto manufacturers that remain dependent on internal combustion engine production.
In this political climate, Musk’s attempts to align himself with conservative ideology have proven ineffective in protecting Tesla from the broader GOP agenda. The Republican war on EVs is not about Musk—it’s about preserving the dominance of fossil fuels and slowing the transition to cleaner transportation.