Update: Senate did modify it — what runs below is substantively accurate, except the end date for EV rebates. That is set to September 30th 2025, so even faster than proposed by the House. – Kay
The “One Big Beautiful Bill Act” has passed the House of Representatives, despite having a name that feels like I dreamt it up for a comedy skit.
Assuming the bill passes through Senate unmodified, that means big changes for EV and PHEV buyers in the USA. Among other things, this congressional budget bill marks the death of the Clean Energy Vehicle tax credit for new and used vehicles of up to $7,500 for EVs and plug-in hybrids.
The tax credit would end December 31st, 2025. Here’s what that means.
TL;DR: EV cars & SUVs will face an average 16% effective price increase, with the lowest cost model up more than 28%, if the law goes into effect as written.
Here’s the full data, with methodology and sources below:
Effective Price Increases for New EVs & PHEVs If Tax Credit is Cut
| EV Cars & SUVs | Max Rebate | Base MSRP | Effective Price Increase |
|---|---|---|---|
| Chevy Equinox EV | $7,500 | $33,600 | 28.74% |
| Tesla Model 3 | $7,500 | $42,490 | 21.43% |
| Hyundai Ioniq 5 | $7,500 | $42,600 | 21.37% |
| Kia EV6 | $7,500 | $42,900 | 21.19% |
| Chevy Blazer EV | $7,500 | $44,600 | 20.22% |
| Tesla Model Y | $7,500 | $44,990 | 20.01% |
| Honda Prologue EV | $7,500 | $47,400 | 18.80% |
| Chrysler Pacifica PHEV | $7,500 | $51,055 | 17.22% |
| Cadillac Optiq | $7,500 | $52,895 | 16.52% |
| Kia EV9 | $7,500 | $54,900 | 15.82% |
| Cadillac Lyriq | $7,500 | $58,595 | 14.68% |
| Acura ZDX | $7,500 | $64,500 | 13.16% |
| Jeep Wagoneer S EV | $7,500 | $70,795 | 11.85% |
| Cadillac Vistiq | $7,500 | $77,395 | 10.73% |
| Average | $7,500 | $52,051 | 16.83% |
| EV Pickup Trucks | Max Rebate | Base MSRP | Effective Price Increase |
|---|---|---|---|
| Ford F-150 Lightning | $7,500 | $62,995 | 13.51% |
| Tesla Cybertruck | $7,500 | $69,990 | 12.00% |
| Chevy Silverado EV | $7,500 | $73,100 | 11.43% |
| Average | $7,500 | $68,695 | 12.26% |
Quick Methodology Section Because No Article is Complete Without Some Math
- “Effective price increase” is the percent difference between Base MSRP minus Max Rebate and Base MSRP. That is the perceived percentage price increase if you went from paying the rebate-reduced price to the full Base MSRP.
- There are maximum price limits and other limitations, so not every trim will qualify for a given model.
- Due to complex battery sourcing requirements, eligibility can change rapidly. We used Cars.com’s list of eligible vehicles from May 2025 as well as EPA data. Dealership can confirm current eligibility.
- Prices sourced from manufacturer website and can change rapidly. Probably will, given rebate & tariff changes!
Important exception for my tax policy wonks in the audience: Electrek does some great coverage, there is an exception written into “One Big Beautiful Bill Act.” GOD, do I have to write that every time we talk about it?
That exception is detailed here. Manufacturers who have not sold 200,000 rebate-eligible units by December 31st 2025 may qualify for the tax credit into 2026. So, auto makers who haven’t moved a large volume of EVs may still benefit.
Where’d All the PHEVs Go? More Were Eligible Last Year
If you’re scratching your head and wondering why there’s just one plug-in hybrid left on the list, thank the 2024 changes to battery sourcing rules. To qualify for the rebate now, automakers have to avoid select foreign components like Chinese cells in their battery packs… and most PHEVs couldn’t make the cut.
Turns out, reworking your globalized supply chain to adapt to rapidly changing government eligibility rules is really, really hard. Who knew?
Losing the Rebate Mattered a Lot for Jeep Wrangler PHEV This Year
That change knocked popular PHEV models like the Jeep Wrangler 4xe out of eligibility, a favorite for folks who want an off-roading machine some of the time, and an energy-efficient vehicle all of the time.
To put the Wrangler PHEV popularity in perspective: in 2024, a whopping 37% of all Wrangler sales were the PHEV version. That’s 55,554 units, more than any EV sold in the U.S. last year other than the Tesla Model Y and Model 3.
Fast-forward to Q1 2025, after the tax credit eligibility was yanked, and only 26% of Wrangler buyers chose the PHEV trim. Translation: yeah, pricing support matters for clean vehicle adoption.
** Laughs in Rivian **
Over in Normal IL, which is literally known as EV Town USA, the folks at Rivian are probably laughing into their Destihl beers. Why? Because they weren’t eligible for the federal EV credit to begin with.
So while everyone else is in subsidy limbo, Rivian’s offering $7,500 off leases until at least June 30th… no legislative wrangling or “will-they, won’t-they” hand-wringing required.
Used EV Credits? Yep, They’re Out, Too
Used EV and PHEV rebates are also on the chopping block. They were only redeemable at dealerships (which made them kinda lame to begin with), but still… you could score some weirdly cheap deals on cars like the Chevy Volt if you timed it right.
Without that credit in play? Can’t think of a reason on Earth why someone would choose to buy a used Volt without the crutch of price supports.
(Watch as I learn how many shooters the Chevy Volt has still got out there, tear me up in the comment section if that’s you.)
So, What Now?
Expect a buying bonanza right through to new year for EVs and PHEVs, both new and used. Then, an uncertain future awaits for America’s fledgling EV car market.
Will automakers follow Rivian’s lead and subsidize the difference? Maybe. Will they get squeezed to hold prices steady, like Walmart is being pressured to “eat the tariffs”? Also maybe. Or will prices shoot through the roof?
We’ll know when we know. In the meantime: buckle up. The EV market looks set to become even less affordable than it already was.
