Sponsors (3)
The bill channels new federal taxes on EVs and batteries into the Highway Trust Fund to secure funding for roads and transit, but it raises EV purchase costs, risks slowing electrification (and associated environmental benefits), and imposes compliance burdens and regressive effects on lower- and middle-income buyers.
Drivers, commuters, and road users will benefit because revenues from a new federal tax on EVs and batteries are earmarked for the Highway Trust Fund to support road and transit projects.
Federal and local governments gain a more predictable revenue stream for highway and transit spending because EV and battery sales receipts are made available to the Highway Trust Fund.
People who buy electric vehicles will face higher upfront purchase costs because a new federal tax applies to EVs and batteries sold after December 31, 2025.
Higher EV prices could slow adoption of electric vehicles, delaying emissions reductions and consumer fuel/maintenance savings.
Auto dealers, manufacturers, and small businesses involved in EV sales may incur additional administrative and compliance costs to collect and remit the new tax.
Based on analysis of 2 sections of legislative text.
Creates a federal tax on electric vehicle and battery sales and directs the revenue to the Highway Trust Fund for sales after Dec 31, 2025.
Imposes a new federal tax on sales of electric vehicles and batteries and directs the revenue to the Highway Trust Fund. The change to the tax code applies to sales after December 31, 2025. The law adds a new chapter to the Internal Revenue Code creating the tax, updates the subchapter table, and amends the statute that transfers certain receipts to the Highway Trust Fund so the new tax receipts are included.
Introduced February 12, 2025 by Debra Fischer · Last progress February 12, 2025