Many analysts expect electric vehicle sales to decline if the new Trump administration moves forward with plans to eliminate the $7,500 federal tax incentive for purchasing and leasing electric vehicles.
While forecasts vary, with some predicting this would result in a 27% drop in demand for electric vehicles, research firm JD Power went a step further and asked consumers how rebates would have influenced their decision to purchase an electric vehicle.
JD Power's study confirmed that federal tax credits played a critical role in consumer decisions: 64% of premium electric vehicle owners said incentives were a primary reason for their decision to purchase or lease their electric vehicle. 49% of mass market electric vehicle owners chose their vehicle based on tax credits and incentives.
More specifically, the survey found that Volkswagen, Chevrolet and Tesla owners were most influenced by the incentives: tax credits and incentive programs were cited as the main reason for the purchase by 81% of Volkswagen buyers, 77% of Chevrolet buyers and 72% of buyers called % of Tesla buyers.
In contrast, only 32% of Hyundai buyers, 24% of Kia buyers and 21% of Toyota buyers said tax credits and incentives were a primary reason for choosing their vehicle.
The results suggest a different impact than what Tesla CEO Elon Musk, a close adviser to President-elect Donald Trump, recently predicted. Musk recently gave his blessing to eliminating federal incentives for electric vehicles, saying the move would likely be “devastating” for Tesla's competitors but would have little impact on his company.
Several trade groups, including the Zero Emission Transportation Association (ZETA), whose members include companies such as Tesla, Waymo, Rivian and Uber, have advocated for maintaining federal incentives for both the production and sales of electric vehicles.
According to ZETA, the incentives have helped domestic manufacturers of electric vehicles and their components such as batteries and increased job opportunities across the U.S., including in many Republican-led states such as Ohio, Kentucky and Georgia, as well as Michigan.
