President Trump has pledged to reverse Biden administration policies on electric vehicle adoption and climate change.

This new Salata Institute policy brief models a menu of eight scenarios under discussion in Washington. Beyond the transition to electric vehicles, the findings have broad implications on American carbon emissions and government spending.

Using a model of consumer vehicle choice and charging station buildout, we analyze eight EV policy change scenarios:

1. Removing the 2022 Inflation Reduction Act (IRA) tax credits for consumer new and used EV purchases as well as the commercial credit that covers retail leases.
2. Removing the IRA tax credits for business and consumer installation of EV chargers.
3. Withholding the remaining unspent funds in the National Electric Vehicle Infrastructure (NEVI) highway charging program (established under the 2021 Bipartisan Infrastructure Law, BIL).
4. Revoking the production tax credit for battery production and critical mineral processing (IRA).
5. Terminating the Clean Air Act waiver that enables California to set tighter fuel economy standards, and which 11 other states and Washington, DC have adopted.
6. Ending all EV tax credits, IRA charger credits, and NEVI.
7. All of the above except terminating the California waiver.
8. All of the above (items 1-5).

Eliminating the EV tax credits has the biggest single effect on EV sales and an outsized fiscal effect—indeed, almost the maximum effect from any combination of policies. When multiple policies are reversed simultaneously, interactions between the policies yield larger effects than the sum of the individual policy changes.

Ending the EV tax credits would reduce EV adoption and drive up carbon emissions more than any other single policy change. It would cut the EV share of new vehicle sales in 2030 by 6 percentage points (ppts), from a Biden policy baseline of 48% to 42%.

Cutting the $5 billion NEVI program is second. That slashes the share of new EV sales by 3.2 ppts. Eliminating all IRA and BIL support for EVs would slash the EV share of new vehicle sales by 12.7 ppts. In the most extreme case of eliminating all support for EVs from IRA and BIL, plus withdrawing California’s waiver under the Clean Air Act, the 2030 EV share of sales would drop 16 ppts to 32%.

Because the EV tax credits are the most expensive of the policies, eliminating all three of the new, commercial, and used EV tax credits would cut 2026-35 fiscal costs by $168.5 billion; eliminating all the policies saves a total of $172.7 billion.

In terms of emissions, eliminating the EV tax credits would increase 2030 emissions by 20.3 million metric tons (mmt) vs. the 2030 baseline forecast; eliminating all the policies raises emissions by a total of 44.1 mmt.

Technical Appendix to Policy Brief available below: