How the One Big Beautiful Bill Will Impact the US Auto Market

How the One Big Beautiful Bill Will Impact the US Auto Market

Hey everyone, DennisCW here! Today, I want to dive into a topic that’s been making waves in the electric vehicle (EV) world: the so-called "One Big Beautiful Bill" and its potential impact on the US auto market. This bill, along with some executive orders, is set to shake things up in ways that might catch a lot of manufacturers—and consumers—off guard. A huge shoutout to our friend Paul Foss for his insightful article on Clean Technica titled "How the Big One Big Beautiful Bill and Executive Orders Will Likely Impact the US Market in Unexpected Ways." Let’s break it down and see how this could play out.

The End of Major EV Tax Credits

If you’ve been keeping up with EV news, you might already know the big headline: the $7,500 federal tax credit for new electric vehicles is ending on September 30th. This applies to both consumer and commercial credits. Additionally, the leasing loophole and the $4,000 used EV tax credit (for vehicles under $25,000 purchased from a dealer, with an income limit of $75,000) are also disappearing at the same time.

On top of that, while Zero Emission Vehicle (ZEV) credits aren’t being eliminated, the penalties for not meeting ZEV goals are dropping to zero. This means manufacturers might not feel the same pressure to hit those targets. Battery manufacturing credits are sticking around, but new, complicated sourcing restrictions could make it harder for companies to qualify for them.

So, what does this mean for the industry and for consumers? Let’s take a closer look.

A Rush for Incentives Before the Deadline

With the tax credits set to expire, I predict a massive rush from manufacturers to push incentives and deals before the end of the quarter. Brands like Tesla, which currently seems to be in a bit of a lull, might ramp up promotions after their earnings call. Typically, Tesla doesn’t roll out incentives until after these calls, but with the September 30th deadline looming, I expect to see some enticing offers in the coming weeks—maybe even as early as August.

This isn’t just about Tesla. All manufacturers will likely dial up their deals to capture customers who are looking to buy an EV before the credits vanish. It’s a race against time to lock in sales while the $7,500 credit is still on the table.

Tesla’s Position and Sales Challenges

Tesla, as the largest player in the EV market, is facing some headwinds with sales currently down. There’s speculation about whether they’ll release an affordable model soon, but nothing is confirmed. Without the tax credit, Tesla might need to lean on incentives to maintain momentum. Elon Musk has long said that Tesla doesn’t need tax credits to succeed, and with their global sales of cars, solar, and batteries, they might weather this storm better than others. Still, I’m curious to see how they’ll adapt in the short term.

The Big Three: Scaling Back on EVs?

The Detroit Big Three—GM, Ford, and Stellantis—are in a different boat. While they’ve been pushing into the EV space, I foresee them scaling back their plans considerably without the tax credit as a carrot. Instead, they might pivot more aggressively to hybrids, which could still appeal to consumers while maintaining profitability. This shift could slow down the transition to full electrification in the US market, especially since oil subsidies remain in place and the 2030 mandates are less stringent now.

Rivian and Lucid: Can They Survive?

Here’s where things get dicey. I hate to say it, but I’m not sure companies like Rivian and Lucid can survive without the tax credit—at least not in their current state. These brands are still working toward operational efficiency and don’t yet have the sales volume to lower prices enough to compete without government support. As one commenter on What’s Inside pointed out, "I feel bad for Lucid and Rivian. They aren’t operationally efficient enough and don’t have high sales yet to get to a low enough price to sell cars to be successful." I couldn’t agree more. The loss of the tax credit might hurt them the most.

Hyundai, Kia, and the Japanese Manufacturers

On the other hand, Hyundai and Kia seem to be doubling down on EVs in the US market, though they might shift some capacity to hybrids and plug-ins to hedge their bets. Japanese manufacturers like Toyota and Honda, who have long prioritized hybrids over full EVs, will likely breathe a sigh of relief. They can continue converting gas cars to hybrids without feeling the same pressure to go all-electric.

What About Chinese EVs?

Chinese EV manufacturers are another wildcard. While they’re unlikely to enter the US market directly due to tariffs and regulations, there’s speculation they could sell "zero-mile used cars" from China or invest billions in US factories to build vehicles here. Another intriguing possibility is that they might send hybrid vehicles to take advantage of the lower 2.5% tariffs. It’s a long shot, but definitely something to keep an eye on.

What Does This Mean for Consumers?

If you’re in the market for an EV, now might be the time to act. With the tax credits ending soon, manufacturers are likely to offer some of their best deals in the next few weeks. After September 30th, the cost of buying an EV could jump significantly without that $7,500 credit, especially for brands that don’t have the scale to absorb the loss through lower pricing.

I’d love to hear your thoughts! Are you planning to buy an EV before the deadline? Do you think companies like Rivian and Lucid can survive this change? Drop your opinions in the comments below!

Must-Have Tesla Accessories

Speaking of EVs, if you’ve recently bought a Tesla or are about to, did you know it comes with zero accessories? Not even a phone mount! Don’t worry, though—I’ve got you covered. Here are a few must-haves every Tesla owner should consider:

• Phone Mount: Keep your phone secure during those quick accelerations.
• Center Console Organizer: Without it, you’ll lose everything in that black hole of a console.
• Invisible Underscreen Station Mount from Jowua: Perfect for storing sunglasses or other small items.

I’ve partnered with Jowua, and I personally use and love their products. They’ve got everything from wireless game controllers to portable air compressors and even electric scooters for those long walks from superchargers. Use my promo code in the description below to save money and support the channel. Plus, get free shipping on orders over $120! Check out the link below for more details. Thanks to Jowua for partnering with us!

Wrapping Up

The "One Big Beautiful Bill" is set to reshape the US auto market in ways we’re only beginning to understand. From the end of major tax credits to potential pivots by manufacturers, the next few months will be critical for the EV industry. I’m excited to see how Tesla and others adapt, and I’m rooting for smaller players like Rivian and Lucid to pull through.

What do you think will happen? Let me know in the comments, and don’t forget to like, subscribe, and hit that notification bell for more updates on the EV world and beyond. Until next time, this is DennisCW signing off!