THE US EV POLICY CHANGED
The U.S. House has just officially passed the “One Big Beautiful Bill" today, and Trump will now sign this bill into law.
This will have wide consequences on both EVs and overall energy in the US.
Here’s what you need to know:
Federal tax credit for new EVs ($7,500) will end on September 30th, 2025.
Federal tax credit for used EVs ($4,000) will also end on September 30th, 2025.
The initial $250 annual fee for EV registration is not in the bill so it seems they’ve abandoned it.
The 45W Commercial Clean Vehicles Credit (up to $40,000) for companies buying electric cars or trucks, including businesses that lease the vehicles to consumers, will end on Sept. 30, 2025.
There are other ways this bill will impact EV ownership and supply chain in the US, too:
Battery manufacturing credits are not eliminated, stay in place but are now stricter.
The bill eliminates penalties for automakers that fail to meet federal Corporate Average Fuel Economy (CAFE) standards — this, together with the recent revoking of EPA waivers by congress, will likely lead to the collapse of the ZEV credits market in the US, as there are no penalties for not meeting fuel economy targets.
Alternative Fuel Vehicle Refueling Property Credit also ends June 30, 2026
Note that this bill does not eliminate state-level incentive programs (like California HVIP, NY Truck Voucher Program).
There is one caveat in the bill that might be beneficial for some automakers, including EV makers like Tesla: a deduction for car loan interest for American-made vehicles.
From 2025 through 2028, interest paid on loans for purchasing a personal-use vehicle will no longer be considered "personal interest" and can be deducted. To qualify for the deduction, the vehicle, in addition to some other rules, must have “final assembly” occur in the United States. Max deductible interest of $10,000 per year. Deduction phases out for taxpayers with income above: $100,000 (single) and $200,000 (joint).
PS, shout out to Sawyer Merritt here who helped go over some of these latest changes here.
What did the One Big Beautiful Bill cut on clean energy?
On Energy Storage, the 48E investment tax credits have a domestic content requirement for both the facility and the technology, and you have to meet both. There are only 3 companies in the U.S. doing that now, but they are just beginning to ramp: LG Energy, Envision AESC, and Tesla (Tesla just revealed their LFP plant at Giga Nevada a few days ago)
On rooftop solar, the bill terminates the 30% tax credit for rooftop solar on Dec 31, 2025.
On geothermal, the bill terminates tax credit for geothermal heat pumps and other home devices on Dec 31, 2025.
Wind power: advanced manufacturing production credit: Terminates credit for wind power components after 2027 and disqualifies facilities that use certain components from China and other “foreign entities of concern.”
Clean electricity production credit: Phases down tax credits for low-emissions electricity sources like wind, solar, nuclear and geothermal power. New restrictions on the use of components from China. Nuclear, geothermal or battery projects would have more time.
The bill kills clean electricity investment and production tax credits for wind and solar that have been in place since 2005 and 1992. Solar and wind farms that enter service after 2027 would no longer be eligible for the credits, a big blow to the US' renewable industry.
Clean hydrogen production credit: Companies must begin construction by the end of 2027 to claim credits
Energy efficient credit for new homes: Terminates a tax credit for the construction of new homes that meet energy star standards by June 30, 2026
The modeling from the Repeat project says The One Big "Beautiful" Bill decreases clean electricity generation in 2035 by more than 820 terawatt-hours—more than the entire contribution of nuclear or coal to our electricity supply today. (see their full report here)
Leaving everything else aside, the US will clearly immensely lose their potential edge in both EV, broader energy, and AI thanks to this.
The latter, because you can not train AI at large level without batteries: they’re critical to smooth out the power fluctuations from AI training and grid voltage drops, as even a small change in power causes AI training to fail.
If you want to see the EV, energy and AI done in the opposite direction, you have to just look at what China does - we’re seeing a huge superpower being built live and incredibly fast.
Okay, but your boy Jaan here isn’t from the US, so apologies for commenting on it. Instead, I’m watching all this unfold from Europe, where, with some exceptions, we mess up our systems equally successfully and in our unique ways.
I want to share this one chart that blew my mind. It doesn’t even show the EVs, the batteries, the renewables. It shows the electricity demand of US vs China (which is connected to it all at once, really).
The 10.07 Petawatt-hours of electricity demand of China in 2024, which was 32.6% of the world’s electricity demand. (link) A third of the whole planet! So on the planet sense, we can certainly be happy they are going at it (mostly) through renewable, efficient, and overall smart ways.
Want to see something cool?
Photovoltaics were the largest segment of new electricity for the third year in a row and grew the fastest for the 20th straight year. Total output reached 2.13 PWh. China amounted to 53% of the increase in PV generation in 2024.
By 2030, China will have the manufacturing capacity to build an entire U.S. worth of generation from solar and storage alone - every single year.
Meanwhile, solar power topped coal power output in the European Union for the first time.
But with the new bill in the US, and seeing some similar anti-battery, anti-EV or anti-renewable (they tend to go hand in hand) directions play out elsewhere, I’m worried.
I don’t want to say it is us versus China it kind of is us vs them and kind of isn’t.
But holy frunk, do we not have the biggest competitive race to motivate us right this moment. How to win isn’t even a question really - how to stay in the race is. This is how:
Build and deploy batteries.
Build and deploy EVs.
Build and deploy solar, wind.
Build and deploy the software and hardware that connects it all.
Build and deploy safe AI.
Build and deploy smart energy systems.
Not only would we maybe catch up with China on this, we’d also win as the whole planet.
If you’re working on any of this, no matter at which level, I applaud you. And I appreciate you. And I’ll appreciate those of you even more that will keep pushing this even if the US pushes through the bill and sets obstacles in your path. Keep going!!!
Okay Jaan, get back to EVs, alright? Don’t mind if I do.
