Within hours of taking the Oath of Office, President Trump signed an Executive Order (EO) titled Unleashing American Energy. One of the things it tries to do is to eliminate the “electric vehicle (EV) mandate.”

There has been a lot of speculation online about what this means and, specifically, if what is known as “the $7,500 EV tax credit” has been revoked.

In short, the EO known as Unleashing American Energy is mostly a political ploy to draw the line in the sand, but little else, at least as far as tax credits go.

The IRS code that gives consumers a $7,500 credit when they purchase an EV is formally known as Section 30D.  It was passed by an act of Congress as part of the Inflation Reduction Act of 2022 and cannot be revoked by EO.  As of this writing on February 7, 2025, Congress has not made any changes to Section 30D.  So for the time being, the tax credit remains intact.

As Section 30D pertains to the tax year, it is possible that Congress could still pass a law that would apply to vehicles purchased at any time during the tax year.  If such an event transpired, it is possible, at least in theory, that someone could purchase a new EV in February and qualify for the credit and have Congress change the qualifying criteria in March and be liable to repay the credit.  The EVA does not give financial advice, and while we believe this is an unlikely scenario, it is not an impossible scenario.

In summary, if you want to purchase a qualifying EV and apply for the $7,500 credit, keep your fingers crossed that Congress does not try to claw it back.  Once you submit your taxes by April 15, 2026, you can uncross your fingers.

That’s for EVs that are purchased.  EVs that are leased are an entirely different story.

The tax credit for leases is done under Section 40W and applies to businesses.  The Biden Administration allowed for a favorable interpretation of Section 40W so that it could apply to companies who lease EVs. When you lease a car, the legal owner is the lease company, not the person who makes the payments and drives it every day.  Under the current interpretation of Section 40W, the lease company receives the $7,500 tax credit, and in most cases, they pass it on to the consumer.  While that would also require an act of Congress to change Section 40W, the liberal interpretation used by the Biden administration can be changed by the stroke of a pen.

This means it will take an act of Congress to withdraw the $7,500 tax credit for EV purchases.  But it would take a simple stroke of a pen, not even an EO, to reinterpret Section 40W to exclude consumer use.

The nice part is that once you sign a lease agreement with a financial institution, the institution assumes the risk of the tax code changing for the credit.

Bottom line – if your lease company is offering you a $7,500 incentive to get you into an EV, you should take it while you still can.